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Family law cases can already be complicated on their own, but they can be made even more complex when bankruptcy and divorce both come into the picture. It’s essential to plan in advance which one you’re going to file first to mitigate costs and minimize confusion. Here’s what you should know before making a decision about your divorce and bankruptcy.

Which One Should Be Filed First?

Married couples wishing to file for bankruptcy together submit documents that detail their financial information, or what is called a joint petition. Often, this procedure is also utilized by couples set to divorce soon because of its efficiency.

Filing a joint petition costs less than filing individually, in addition to the combined qualifying debt of both spouses being wiped out. Although filing fees are the same for individual and joint filings, you and your spouse can split them if you file for bankruptcy together before your divorce. However, keep in mind that this is advisable only if your relationship is amicable.

Family lawUnderstand that there are some cases when filing for divorce first is your only option, such as when you wish to file for a Chapter 7 bankruptcy but you don’t qualify because of income requirements. In this case, it would be better to file for divorce first so that you can meet the requirements for Chapter 7 when you file individually.

Generally, it’s not advisable to file for bankruptcy and divorce at the same time. If you choose either Chapter 7 or Chapter 13 bankruptcy, your assets will be frozen and they can only be divided after the divorce has been finalized.

How Is Chapter 7 Different From Chapter 13?

Couples who want to get through the divorce proceeding quickly usually file for a Chapter 7 bankruptcy because dischargeable debts, such as medical and credit card bills, can be wiped off in as short as three to six months.

On the other hand, a Chapter 13 bankruptcy requires you to set up a repayment plan that can last from three to five years. This considerably stretches out the divorce process, so if you prefer this option, it’s better to file it individually after divorce proceedings. Nevertheless, always consult a qualified family law attorney before making your final decision.

 

 

Protect your finances and your future by discussing your divorce and bankruptcy plans with an experienced family law attorney from Achille Law, P.C. in Brookville, PA. John G. Achille, Joseph H. Ellermeyer, and Mark A. Wallisch use their skills to deliver the best possible outcome in legal cases involving bankruptcy, family law, and estate planning. Call (814) 849-6701 to schedule your free consultation or visit their website to get in touch with them online.

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