Should I File Bankruptcy Before Or After My Divorce?

Should I File Bankruptcy Before Or After My Divorce?

Getting divorced is a stressful process that can become even more arduous if accompanied by financial problems. Since divorce is one of the leading causes of financial ruin, it’s smart to consider your bankruptcy options before and after a divorce. Let’s take a look at some of the factors you should consider when deciding if you should file bankruptcy before or after a divorce.

Bankruptcy Type

One of the biggest factors in deciding when to file bankruptcy (before or after divorce) is the type of bankruptcy you want to file.  If your bankruptcy is a simple Chapter 7 bankruptcy, then filing it before your divorce may be the best option. Since Chapter 7 bankruptcy can be filed and complete in just several months, there’s no reason you and your spouse can’t file jointly, discharge your debts, then divorce afterwards.

However, if you’re filing Chapter 13 bankruptcy, it may not be a good idea to do so before getting a divorce because this type of bankruptcy lasts three to five years. If you plan to divorce within that time, you’ll need to go through the process of having the bankruptcy case separated or closed once you and your spouse officially end the marriage.

Household Income

Your household income is another factor you should consider when deciding if you’re filing bankruptcy before or after divorce.  If you and your spouse file a joint bankruptcy you’ll save money on filing fees and the cost of hiring a lawyer. However, since your household income will be determined by what both you and your spouse earn, filing bankruptcy before your divorce could mean that your income is too high for Chapter 7 bankruptcy. In that case, filing Chapter 7 bankruptcy after your divorce might be beneficial.


Before rushing to file bankruptcy before your divorce, work with a bankruptcy attorney to determine how your assets will be protected if you file a joint bankruptcy with your spouse. This is important if you jointly own property such as a house, vehicles and other assets. And depending on the jurisdiction you live in, filing a joint bankruptcy with your spouse could give you extra protection in the form of double exemptions. For example, if your home value is exempt up to $100,000 for a single bankruptcy filer, depending on the law in your jurisdiction, filing jointly could give you a bonus exemption making the house exempt for up to $200,000.

Relationship Status

If you’re on amicable terms with your spouse, then filing for bankruptcy before a divorce could be a viable option. However, attempting to file bankruptcy with a spouse who is hostile to your financial interests could actually cause more harm than good. You will need to depend on your spouse to show up to court and provide all necessary financial documents, and you need to be confident that they will work with you and your attorney. When considering whether you should file bankruptcy before or after divorce never overlook the status of your relationship.

If you want to discuss when filing for bankruptcy is best, speak with an attorney today.