Financial hardship and marital problems frequently go hand-in-hand. Thus, it’s not uncommon for couples to simultaneously contemplate getting a divorce and seeking debt relief through bankruptcy. If these are the circumstances you find yourself in, it’s important to recognize that bankruptcy and divorce cases can have a significant impact on one another, and the order you file in can make all the difference in the results you receive. Here are some things to know if a bankruptcy and divorce are in your future.

What to Understand When Pursuing a Bankruptcy & Divorce 

Which Should You File First?

Once you’ve reached the point where you’re considering both bankruptcy and divorce, you’re likely wondering which to file first. Often, individuals will want to end their marriage and then deal with the debt after, but many attorneys recommend filing bankruptcy before seeking a divorce. Eliminating debt prior to terminating your union will mean there is one less issue that must be worked out in your divorce settlement.

Additionally, you may lose the opportunity to discharge the debt later if the court orders you to pay it as part of your settlement agreement. In turn, filing for bankruptcy first can prevent you from becoming responsible for paying your ex-spouse’s financial obligations. Another benefit of handling your bankruptcy and divorce in this order is that West Virginia law allows spouses who file jointly to double their exemptions and protect more property.                                                                                         

Is Chapter 7 or Chapter 13 the Better Option? 

You must also determine what type of bankruptcy is best for your situation. Couples can either choose to file a Chapter 7 or Chapter 13. In many cases, Chapter 7 can be finalized in a short timeframe, making it an appealing option if you wish to file for divorce as quickly as possible. However, while it provides the chance to fully discharge all unsecured debts, you may be required to relinquish some of your assets to pay back creditors. Chapter 13 bankruptcies allow debtors to keep their property while reorganizing debt into a repayment plan, but this option takes three to five years to complete. Generally, that’s too long to wait for those looking to end their marriage.

Because of the challenges that a bankruptcy can bring to a divorce and vice versa, it’s essential to consult an attorney before moving forward with either. Offering decades of experience in bankruptcy law, the legal team at Kratovil Law Offices, PLLC can make sure you understand your options and guide you through the process of filing for Chapter 7 or Chapter 13. They have helped many residents in the Eastern Panhandle of West Virginia make a fresh start free of debt. Call (304) 728-7718 to discuss your financial goals, or visit them online for more information on the benefits of declaring bankruptcy.