It’s an unfortunate fact, but divorce and bankruptcy go together for many married couples. The statistics are telling: almost half of marriages result in divorce, and of that number, 22% are caused by fights over money. If a couple is considering divorce and bankruptcy, it may make a difference if one is requested before the other.
Debt And Marriage
People request bankruptcy because of an inability to pay debt. In jurisdictions with community property laws, debts gained during marriage are divided equally. If both spouses are in debt, it may seem obvious that bankruptcy should come first. That’s not always true, however; it may be more beneficial to file for divorce first depending on income, budget, and assets.
Advantages Of Filing For Bankruptcy First
Getting a bankruptcy before divorcing can save money for these reasons:
1. Filing fees are the same as in an individual bankruptcy. It can get costly if both parties file separate bankruptcies. If both need to file, doing so before the divorce can save on court fees.
2. Lawyer’s fees. Hiring a single bankruptcy attorney is cheaper than hiring two. However, the attorney should know about the divorce to avoid a conflict of interest.
3. Exemptions. In bankruptcy, exemptions allow debtors to keep some of their property from being seized. If a couple has significant assets, filing before a divorce can allow them to keep more of their property.
Benefits Of Filing For Divorce First
Getting a divorce before a bankruptcy may be beneficial if both spouses have high incomes. To get Chapter 7, the couple’s income must be less than a predetermined amount. When filing while married, joint income determines eligibility. If the joint income is too high to get Chapter 7, a person may qualify based on their own income after divorce. A bankruptcy attorney or Divorce Lawyers in Wichita can tell clients which approach would be more advantageous.
If a married couple needs help filing for divorce or bankruptcy, they should consult a bankruptcy lawyer and Divorce Lawyers in Wichita. Ideally, they should find a lawyer such as The Law Offices of Todd Allison and Sarah Newell who can handle both types of cases. You can also visit them on Google+ for more information.