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It’s not uncommon for couples who are considering divorce to find themselves struggling financially. Even if you’re relatively comfortable at the start of the proceedings, you could still end up in a fairly desperate position upon finalizing the divorce. Therefore, many people consider discharging applicable debts before or shortly after ending their marriage. If you’re not sure whether you should declare bankruptcy or file for divorce first, here’s what you should know about the subject.

When to Declare Bankruptcy First

There are a few scenarios in which declaring bankruptcy before divorcing makes sense. If you and your spouse are relatively amicable, for example, you can take advantage of maximizing applicable exemptions under Chapter 7 by filing together. Filing jointly will also save in attorney fees and court costs. Additionally, discharging certain debts before ending your marriage will streamline the divorce proceedings considerably. 

When to File for Divorce First

bankruptcyDespite the potential advantages of filing a joint bankruptcy petition, there are a few reasons to commence with the divorce and then declare bankruptcy individually. For example, this may be the best option if your combined income disqualifies you from filing Chapter 7. Filing for divorce first is also wise if you want to pursue Chapter 13; since Chapter 13 bankruptcy essentially reorganizes debt, it requires petitioners to establish a three- to five-year payment plan. You do not want to go through all of the work of devising this plan only to have to modify it later during the divorce proceedings. 

 

If you are considering filing for both divorce and bankruptcy in Wisconsin, turn to Arndt Buswell & Thorn SC. Located in Sparta, this full-service firm has been helping clients throughout Monroe County navigate complicated legal proceedings since 1991. In addition to bankruptcy and family law, they are well-versed in the statutes and precedents governing personal injury, criminal defense, environmental, estate planning, probate, and employment law. To reach out and discuss your financial situation with a divorce attorney on their team, visit their website or call (608) 269-1200. 

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