What about filing for divorce first? Is that a viable option? Should soon-to-be
always file for bankruptcy first? Not necessarily. Consider the finances carefully,
because that may prove to be the telling factor as to what you should
do first. You've already read that oftentimes bankruptcy is your first
step as long as you're on mutual and beneficial terms with your partner.
Believe it or not, even if you're friendly with your soon-to-be ex-spouse,
sometimes filing for the divorce first is the simpler and better option,
and here's why:
Consider your joint income, for one thing. Under Chapter 7 bankruptcy,
you may not qualify if it's too high. As a result, if you file for
the divorce first, you may then file for a Chapter 7 bankruptcy as long
as your sole income qualifies for that chapter. It's a common situation
to not be eligible under Chapter 7
as a married couple, but qualify
individually. Consider your options.
Proper planning also might be called for in a divorce to relocate certain
assets outside a trustee's influence. Take a house, for example. If
one spouse takes it due to property distribution under a divorce petition,
then a bankruptcy filing won't matter to the ex-spouse at all. It
essentially protects that spouse from creditors. Another reason to consider
divorce first is the fact that you have to consider support, such as for
children and alimony. If you have a lot of those arrearages, take note:
your bankruptcy filing won't look good if they're not taken care of
before filing for the bankruptcy.
It's a difficult time when dealing with divorce and bankruptcy. Just
know this, though: it's a new beginning. As long as it's approached
collectively, peacefully and mutually, overall both parties come out better
for it without any emotional headaches and bitterness. The law is meant
to help – not hinder.