Balancing divorce and bankruptcy filings

| Aug 18, 2017 | Debt Relief, Firm News |

Ohio spouses know that of the many things that may contribute to conflict and discord in a marriage, financial challenges is perhaps one of the most common. For many people, things can get so bleak that not only do they contemplate ending their marriages but they also pursue the option of filing for bankruptcy. When faced with both of these experiences at the same time, it is important that the right choice be made as to which process to file for first.

According to The Balance, there may be some clear advantages for people who are able to file for bankruptcy before they initiate their divorce proceedings. One benefit is that a married couple will have larger exemption amounts that may allow them to keep more of their assets than if they filed Chapter 7 bankruptcies separately after getting divorced. An exemption identifies the value of an item that a filer is allowed to keep versus have liquidated during a Chapter 7.

Another benefit of a pre-divorce bankruptcy is the ability to reduce or eliminate joint debt. This may protect people from future problems and also simplify the property division aspect of their divorce.

My Horizon Today does explain, however, that not everyone may be able to or want to file for bankruptcy first. People who truly cannot communicate well or have a high level of conflict may not really be able to navigate a bankruptcy together. For couples who may prefer a Chapter 13 bankruptcy, getting divorced first may be best as this type of bankruptcy lasts a minimum of three years.