Should you choose bankruptcy before or after divorce?

On Behalf of | Mar 12, 2021 | Bankruptcy |

Women who are going through a divorce have a lot to handle. They need to set out a budget and make sure that they negotiate for their fair share of assets. They have to consider debts and how they’ll be divided.

Debts are one of the most significant issues that come up during a divorce, and they should not be minimized as a topic of discussion. Significant debt could come back to haunt you, even if it’s technically debt that belongs to your spouse.

If you have debt while you’re married, make sure it can be paid off

Before you get divorced, make sure that any debts are resolved. If that’s not possible, or if financial problems are a cause for concern, it may be time to talk to your attorney about filing for bankruptcy first.

Some people wait to file for bankruptcy after divorce, but there are a few factors to consider. For example, if you don’t have any debt in your name and the marital debts are in your spouse’s name, then they may benefit from going through bankruptcy. The bankruptcy doesn’t need to involve you, and that could help you protect your credit. Your credit report is not merged with your spouse’s, and their debt won’t necessarily affect yours. That doesn’t mean that a judge won’t rule that you owe on it, which is why choosing to settle those debts before filing for divorce isn’t a bad idea.

If the debts are from before your marriage and are not marital debts, then it’s possible to wait to enter into bankruptcy later. If they are in your name, you may opt to go through the divorce, see the outcome and then settle your debt if needed.

Debt is a complex issue during divorces

Debt is a complex issue during divorce, and it should be treated that way. If you aren’t sure if a bankruptcy is the right option for you to go through together with your spouse or on your own, you should look into your legal options as well as other debt-relief methods before you make any significant changes in your life.