Getting divorced often leads to serious financial problems, which eventually lead many people into bankruptcy. While this can be an excellent way to get a fresh start, liquidating your debts and filing for divorce at the same time can complicate matters even more. In general, it’s always best to conclude one legal matter before the other, so your cases don’t overlap. Keep reading to find out which process should be handled first. 

Filing for Bankruptcy First

For most people, it’s best to file a joint bankruptcy petition with your spouse before dissolving your marriage. Wiping out your debts first lets you both start new lives with a clean slate and minimizes your future financial burden. It also allows you to double your exemptions, leaving more assets for you and your spouse to divide in the divorce.

If you get divorced first, your spouse may file for bankruptcy on their own later. Even if they agreed to take responsibility for certain debts in the divorce, your name would still be on the account. In this case, the creditor can come after you if your former spouse files for debt relief years after the divorce.

Getting Divorced First

While filing for bankruptcy first is usually best, the opposite is true in some situations. For instance, the combined income of you and your spouse may be too high to qualify for a chapter 7 filing. Getting divorced lowers the eligibility limits, so only your income is counted in the means test. If your divorce is especially acrimonious and you and your spouse can’t work together on the finances, then divorcing first may be the only way forward.

With highly trained lawyers dedicated to helping people solve debt problems, Sam Turco Law Offices is not your typical bankruptcy law firm. From their offices in Lincoln and Omaha, their skilled legal team helps borrowers throughout Nebraska navigate the complexities of the bankruptcy system and regularly teaches the forefront of the law to other attorneys. Visit their website to learn more about the benefits of chapter 7 bankruptcy, follow their Twitter for tips and updates, or call (402) 614-7171 for your initial consultation today.