How to Handle Bankruptcy and Divorce at the Same Time

Learn strategies for navigating bankruptcy & divorce together. Equip yourself with the tools to balance your financial & personal upheavals.

Amidst life’s challenges, navigating bankruptcy and divorce together may feel overwhelming. Yet, with the right strategies, you can manage this complex phase effectively.

Should A Person File for Bankruptcy Before the Divorce?

A person can file for both proceedings; however, in the majority of jurisdictions, a divorce (and the division of any debts and liability it entails) needs to be completed before the bankruptcy filing can proceed.

It is easier to simply file for the divorce and settle all financial issues before taking on the bankruptcy. However, there are exceptions, and a divorce attorney, in conjunction with an accountant, will be your best advisors.

When is the Right Time to File Bankruptcy Before Divorce?

A bankruptcy may cancel marital debts for which both partners are responsible. Significantly reducing joint liabilities can simplify and speed up the entire divorce process. In some states, if a married couple files for bankruptcy, each partner may be able to keep a greater share of the assets than if they had filed as individuals after the divorce.

When Should You File a Divorce Before a Bankruptcy?

If a couple opts for a Chapter 7 bankruptcy instead of a debt-restructuring Chapter 13, some debts might get canceled. However, Chapter 7 requires an income low enough to qualify, which will more than likely be the case if the partners file as individuals after the divorce.  

Credit Rating and Divorce

Whether the bankruptcy or divorce happens first, there will be likely repercussions to the couple’s credit standing.

For example, a Chapter 13 bankruptcy file could leave both parties responsible for the repayment of debts. In addition, bankruptcy will not eliminate or discharge certain types of liabilities, such as student loans. After the divorce and bankruptcy filings, both parties might have to repay any co-signed loans.

Bankruptcy may bring momentary relief from debts, but the negative consequences will be severe, and the parties may struggle to qualify for loans and credit cards. Divorce itself has no consequences on credit scores, but a bankruptcy filing could lower such scores. Refusing to pay a court-ordered share of the debt can worsen the credit consequences that take years to repair.

Plan Ahead

If a couple knows that divorce and bankruptcy are imminent, it is best to plan and consult with a divorce attorney and bankruptcy accountant. This can ultimately save them a great deal of trouble and money.

Filing a single bankruptcy as a couple might be more efficient. It could eliminate qualifying debt for both parties and streamline the bankruptcy and divorce process. This will reduce any division of debt issues during the divorce.

Bankruptcy and Divorce Expenses

Since the cost to file bankruptcy is the same for a couple or an individual, it might make sense to file as a couple and incur only one filing fee. You should discuss this with a bankruptcy attorney. Ensure that a pending divorce doesn’t conflict with the bankruptcy filing.

File Chapter 7 vs. Chapter 13

The purpose of a Chapter 7 bankruptcy is to eliminate unsecured debts such as credit cards or medical expenses. Before a divorce, you can quickly streamline the division of assets and debts.

A Chapter 13 bankruptcy requires a debt restructuring and the repayment of all, most, or some of the debts involved. This can stretch out for several years, so filing for a Chapter 13 bankruptcy should probably happen after a divorce.

Joint Marital Debt

A court may decide which spouse is liable for certain debt payments. But if a spouse refuses to pay or files a post-divorce bankruptcy, the creditor still expects payment. The other spouse will be held responsible. If this spouse does make the needed payments, he or she has the right to demand reimbursement since the non-payment spouse violated the divorce agreement.


Filing for bankruptcy and divorce simultaneously may not be the best idea. If a couple knows that both events loom ahead, a discussion with a bankruptcy attorney is advisable. Remember that bankruptcy won’t discharge certain debts like alimony and child support.

The legal process can get difficult, which is why we always recommend that you seek the assistance of counsel; or at least have a consultation. Schedule a consultation with one of our attorneys today to review the issues of your case, the legal options you may have, and certain rights that pertain to your unique situation.

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