When couples decide to divorce, money often becomes an issue. In some cases, one or more in the couple may find that they have to file for bankruptcy so that any money issues can be handled. However, the question often becomes whether or not it is wise to file for both bankruptcy and divorce simultaneously.

There are many things to consider before taking any measures during a time of divorce. There is no one true answer for every situation. Several variables come into play, including how much debt there is between the couple, property that is shared, and the type of bankruptcy that will be filed.


Any property that is jointly owned in a marriage is going to be included in the bankruptcy estate. If the bankruptcy is filed before a divorce, it is crucial to ensure that the state provides the necessary exemptions in order to protect the property. Exemptions are used to determine how much property each person in the divorce is allowed to keep after the bankruptcy is settled. By filing jointly before the divorce proceedings, the amount of exemptions can be doubled to both people in the marriage. This can provide double amounts of coverage.

For couples that do not have a large amount of property to divide, it is more beneficial to file separately after the property has been divided in the divorce decree.

Type of Bankruptcy

The next thing to consider is to determine which type of bankruptcy to file. The most common choices in these situations are Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is typically used to offset unsecured debt, such as unsecured loans or medical bills. These proceedings can often be completed in a short timeframe, so any financial issues can be settled before the divorce is finalized.

Chapter 13 bankruptcy takes considerably longer. This arrangement will require the repayment of debts through an agreed repayment plan. For those intending to file Chapter 13, it is better to do so after the divorce is finalized.

Determine Who Pays

Another consideration regarding timing of a bankruptcy is deciding who is paying for what. Litigating debt responsibility can be very time consuming and expensive for everyone involved. If one person was ordered to pay one joint debt in the divorce agreement but does not pay it, the creditor can come after both partners for the money. This is why it is so important to consider removing all debt through bankruptcy before filing for divorce.

Divorce is not an ideal thing to think about, nor is bankruptcy. However, it is imperative to make these decisions for the betterment of everyone involved. Be sure to work closely with both bankruptcy and divorce attorneys, such as at http://www.morrisonmurfflaw.com, to decide which option is best.