If you plan to divorce, returning to single status will affect your finances. To lessen some of the strain, many couples file for personal bankruptcy. Doing so can discharge some debts, making the adjustment to a one-income household easier. Consider these factors when deciding whether to file for personal bankruptcy before or after divorce proceedings.

Why File for Bankruptcy Before Divorce?

If you plan to file for Chapter 7 bankruptcy, the process typically takes 90 days. By filing jointly, you and your spouse can resolve financial issues quickly that would otherwise make divorce negotiations more difficult. This includes what to do with unwanted contracts, costly home mortgages, and car loans. Dissolving joint debt together means all issues will be handled in the same case, which will cut down court costs and qualify you for exemption increases. 

When Should You File for Bankruptcy After Divorce? 

While a Chapter 7 bankruptcy case can be completed in a matter of months, it could take three to five years to close a Chapter 13 bankruptcy case, slowing down divorce proceedings. If you plan to file for Chapter 13, doing so after the divorce could help you avoid complications. If your joint income is too high to qualify for Chapter 7, you might meet the requirements after the divorce so you won’t have to commit to a years-long payment plan to put a personal bankruptcy behind you. 

Regardless of whether you file for personal bankruptcy before or after the divorce, reach out to Donald L. Spafford, Jr., Attorney at Law for legal representation. Based in Honolulu, HI, the attorney will help you understand the process and how state laws will influence your case. To schedule a consultation and find out how the lawyer has put his more than 30 years of experience to work for Oahu residents, call (808) 532-6300. Visit the law firm online to learn more about the counselor’s qualifications.