Dissolving a marriage can put a couple under serious financial strain. As such, it’s not uncommon for bankruptcy and divorce to go hand-in-hand. Declaring bankruptcy can even be the best way for divorcees to get their finances under control and back on track. If you and your spouse have decided to separate and you’re facing economic trouble, it’s beneficial to consult with an attorney about your bankruptcy options. Here are some of the considerations they will go over with you before filing.

What to Know About Bankruptcy & Divorce 

Deciding Which to File First Is Important 

If you are considering filing for both bankruptcy and a divorce, it’s essential to determine which you should file first. The timing will impact the chapter you’re eligible for, how much property you’re allowed to keep, and the overall costs of your bankruptcy and divorce. In Ohio, filing a joint bankruptcy before divorcing will give you the opportunity to double your exemptions and protect more property, reduce attorney and filing fees, and eliminate joint debts. On the other hand, filing after a divorce may be necessary if your income as a couple disqualifies you for a Chapter 7 bankruptcy. It’s typically not recommended that you file for bankruptcy and divorce at the same time, as this will only complicate matters and end up dragging out the divorce process. 

Not All Debts Can Be Discharged in Bankruptcy  

Filing bankruptcy won’t make all debts automatically go away. Bankruptcy law does not allow for the discharge of child support, alimony, student loans, certain taxes, court-ordered fines or penalties, or attorney fees owed in child custody or support cases. If you have any of these types of debts, you will still be responsible for paying them back once your bankruptcy case is closed. Failing to accurately disclose all the debts you and your spouse have between one another can also impede your ability to file efficiently.

Filing Chapter 7 vs. Chapter 13 

Couples can file for either a Chapter 7 or Chapter 13 bankruptcy. Chapter 7 generally takes a shorter time to process and allows for the full elimination of unsecured debts. However, you may be required to give up some property to pay back your creditors. With a Chapter 13 filing, you will keep your property but must pay back some or all of your debt according to a repayment plan that is set up to last three to five years. 

Getting a divorce and filing bankruptcy are both stressful experiences that you shouldn’t go through alone. Offering close to 30 years of legal expertise, Riley Resar & Associates of Lorain, OH, will guide you through making the best decisions for your situation and provide support during this difficult time. Their attorneys focus on both bankruptcy and family law, to ensure you a secure and financially healthy future. Call (440) 244-5214 to schedule a consultation or visit their website for more information about their services.