Unfortunately, money problems often lead to divorce, and in today's economy bankruptcy often becomes part of divorce. Many people wonder if they should file bankruptcy first, or wait until the divorce is over to file? The answer is not always simple.
A married couple, even if they aren't living together, can file for bankruptcy. After a couple is divorced, they can no longer file together, which means that each person would have to file, and incur two filing fees. You can save a filing fee if you file before a divorce.
At Central Coast Bankruptcy, Inc., we are sensitive to your unique situations. It is important that you be honest about your marital or domestic situation with us, so that we can work with you to make the process go well and to avoid potential conflict of interest in the future.
If you are thinking about divorce, but still living together, your joint income will be considered as part of the "means test" to file a Chapter 7.
Generally, there are three things that get sorted out in a divorce: property division; child custody; and spousal and child support. (Spousal support is also called "alimony.") The automatic stay in bankruptcy will stop any property division but won't stop the determination of child custody or the payment of child or spousal support. Thus, if you file for bankruptcy before the property is fully divided up, that process will go on hold for a while. Since the determination of property rights includes the payment of debts, the bankruptcy will often help resolve some of those issues.
If your marriage is breaking up, it might be nice to clean up your debts too and get a true fresh start.
