Bankruptcy can be a significant decision that can change how you live for the rest of your life. Just when you have finalized your bankruptcy and taken control over your finances once again, you may feel like there is more you can do to protect your best interests. Continuing to look after your future by pursuing divorce is a common decision many people choose to take after bankruptcy.
Finances are a common reason why couples get a divorce. In some marriages, poor financial decisions may be the reason the couple filed for bankruptcy in the first place. If you are considering bankruptcy and divorce in your future, there are some things you may want to know.
Taking control over your finances
If you are trying to end your marriage and file for bankruptcy to help yourself start anew, doing both at the same time may not be the best decision. Along the bankruptcy process, an application will have an “automatic stay” put into effect, which prevents creditors from reaching out to you and freezes your assets and property. This hold can make asset division extremely challenging.
Depending on your situation, it may be better to file for one option before the other. If you believe that your spouse will be cooperative in your divorce, it may be best to file for bankruptcy first. This way, you and your spouse can share any costs during the process, and you also may be able to avoid any joint debt.
However, if you and your spouse earn too much collective income, it may disqualify you from Chapter 7 bankruptcy, making divorce the better option to pursue first. That way, you may be underneath the income threshold as an individual filing for bankruptcy after divorce.
Where do you start?
While filing for both bankruptcy and divorce seems like an impossible challenge, it can be done with the proper help. Consult with an attorney skilled in both subjects to gain insight into the best course of action for you.