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What should come first? Bankruptcy or divorce?

It's no secret that financial issues can lead to marital discord, and subsequently to divorce. With that, many people in financial (and emotional) toil may be unsure about how to proceed with dividing property and debt. The question becomes much more complicated with the prospect of bankruptcy is involved. Specifically, what should be done first: a divorce or bankruptcy?

Ultimately, the decision depends on your individual circumstances, but the following issues should be considered.

What type of debt do you have? It is helpful to know what type of debt you have (e.g. credit card debt, medical debt, car loans, judgments). If the debt is dischargeable, chances are that filing for bankruptcy before divorce will be helpful, as it will eliminate the question of who will be responsible for paying off debt after the divorce.

Are there any property division issues? If divorcing parties are battling over property, especially assets that one party cannot afford by themselves, bankruptcy may help in resolving property division disputes. Essentially, all non-exempt property will be surrendered to the bankruptcy estate, which means that there will be far less property to divided once the discharge is granted.

Are there any shared debts? If many of the debts are shared, perhaps filing a joint bankruptcy will help. After all, if one spouse's debts are discharged, creditors may still be able to pursue the other spouse for the unpaid debt.

It is important to note that bankruptcy will not help to discharge student loan debt or child support obligations. If you have additional questions, a family law attorney with knowledge of bankruptcy can help.

Source:, Divorce, bankruptcy sometimes go hand-in-hand, September 28, 2013

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