Do you ever feel that life has thrown you a series of curve balls? If you are contemplating both bankruptcy and divorce, it's very understandable why you may feel this way.
It's not uncommon to see people facing these dual dilemmas, as financial stress is one of the leading causes of divorce. But regardless of the reasons for your unhappy relationship and financial insolvency, if you are teetering on the precipice of potential disaster, here's some advice to help you make wise decisions.
Why it's better to file first for bankruptcy, then divorce
You might think that it doesn't matter which petition you file first. However, it's important to think strategically so that you walk away from both situations in the best possible position to begin anew.
Many attorneys urge their clients to consider filing for bankruptcy prior to getting divorced. There are a number of reasons for this, including the following:
- You can save money. Filing jointly for bankruptcy with your soon-to-be ex-spouse is generally cheaper than filing two separate cases. You will save on filing fees as well as legal fees.
- You may dodge liability on joint debts. When debts are discharged through bankruptcy, the slate is wiped clean. That is not the case with divorce. Even if you divide your debts during your divorce, your ex-spouse's creditors may still pursue you for any unpaid debts from the marriage.
- You could get stuck with all of the debts from your marriage. It's a hard pill to swallow, but if your spouse files for bankruptcy first, you could end up in a worse position that before.
- Your bankruptcy exemptions are doubled. If you're struggling to remember any benefits of marriage, this is definitely one to keep in mind.
- It just might save your marriage. This may apply to couples who fight a lot about finances. Getting rid of all of your debts can alleviate enough stress that you might decide to get counseling and give your marriage another shot.
Find out the best way before starting
As both filing for divorce and filing for bankruptcy can be incredibly stressful, do your future self a favor by finding out now what will work best for you and your situation.