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Considerations for bankruptcy during divorce

On Behalf of | Feb 7, 2018 | Bankruptcy, Family Law

Though finances are one of the leading causes of divorce, going through a divorce is an expensive process in itself. For those already in a pressing financial predicament, bankruptcy may help to bring some relief.

If you are considering a divorce or are in the process and want to enact bankruptcy, it is important to understand how it will play out. There are a few key considerations to make when looking to enact bankruptcy during divorce.

Filing status

The filing status is a very critical factor in a bankruptcy, and it is an important one to consider. If both parties are looking to eliminate debt and they share a large amount of property or a few valuable assets, then a joint filing may be beneficial for both parties. On the other hand, if one person holds most of the debt and the couple only shares a few assets, a single filing may protect the party who is not in debt. A single filing may also help to make sure that important marital property, such as a family home, does not become part of the bankruptcy.


When a party chooses to enact a bankruptcy or divorce while in the process of the other, it has a serious effect. A bankruptcy decreases the assets of the debtor; therefore, enacting a bankruptcy during a divorce requires approval, and the bankruptcy process must conclude before the courts finalize the divorce. On the other hand, a divorce usually decreases the amount of expendable income that a debtor has, so when a party files for divorce while in bankruptcy, the courts must recalculate the debtor’s income and restructure the bankruptcy. It is important to understand how these changes may affect either process in the debtor’s specific situation.

These are a few key considerations when contemplating bankruptcy during divorce. Take some time to review the applicable laws and think about consulting with an attorney to determine the best choice moving forward.