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.