The order of divorce and bankruptcy can help save money

The order of divorce and bankruptcy can help save money

On behalf of Stange Law Firm, PC posted in Property Division on Wednesday, February 19, 2020.

Financial stress is a big problem in marriages or any other arrangement that combines emotions with the practical issues of life. Although it may not have as much to do with a relationship as it may seem, a couple facing bankruptcy may need to deal with that issue before they should divorce.

There is no simple answer to this problem. It may be a good idea to declare bankruptcy before a divorce or it may be better to wait. It depends on several factors, including remaining assets and where a person may live.

If a couple is concerned about exemptions, it may be best to wait to get divorced. A married couple may claim double the amount of exemptions in most cases. On the other hand, it may take longer to distribute assets from a divorce if a bankruptcy is proceeding at the time.

Divorce might be a better thing to do first if a couple has too high of a joint income to file for the type of bankruptcy they were preparing. Chapter 7 bankruptcy, also called liquidation, may only be possible when someone has lower income expectations. However, if people expect to maintain good relations and communication after a divorce, it may be best to file for bankruptcy first.

Whether a person is considering divorce or changing other financial arrangements, legal representation may be a good idea and part of the plan. A lawyer can help represent a person’s interests at some of the hardest times in life, as well as handle some of the harder parts of the process.

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