5 Tips When Deciding to File for Bankruptcy and Divorce


Finances are a leading cause for divorce, so it comes as no surprise that divorce and bankruptcy are often linked. Each is a separate legal proceeding but can significantly affect the other. Here are 5 important things to know when it comes to bankruptcy and divorce:

1. Hiring Legal Counsel

Both bankruptcy and divorce can legally be done without hiring an attorney. However, handling these complex legal matters alone is not recommended. If spouses choose to file for bankruptcy separately after the divorce is finalized, they will have to hire two separate attorneys.

If they file the bankruptcy while they are still a married couple, only one attorney (and filing fee) is needed. The bankruptcy attorney hired before the divorce cannot be used by either spouse for the divorce because of a conflict of interest.

2. Filing Fees

Both bankruptcy and divorce cases require payment of filing fees. When seeking a divorce, the spouse filing the petition pays the upfront court filing fees. Only one bankruptcy filing fee is required if the spouses file together.

If a bankruptcy is needed after the divorce, each spouse will have to pay their only filing fee. It can be a benefit if the spouses choose to file for bankruptcy before divorce since they will only have one filing fee to pay the bankruptcy court.

3. Simplifying the Debt and Asset Division

Process Another benefit to filing a joint bankruptcy case before filing a divorce case is that the division of debts and property may be simplified.

Most debts will already be discharged, and any property owned by the couple already will be identified and can be divided easily. Resolving debt prior to filing for divorce will save time and money when it comes to divorce costs.

4. Which Bankruptcy to File

Spouses can choose the type of bankruptcy that works best for them. Chapter 7 bankruptcy is a liquidation proceeding that helps the filer receive a discharge of their unsecured debts, such as credit card and medical debts (without having to repay the debts).

Chapter 7 can normally be completed within a few months so this option is often the best if the couple is looking to get divorced quickly. Chapter 13 is a much longer process that involves a repayment plan that may last for three to five years. This type of bankruptcy could be best if one of the spouses has past due mortgage, tax or child support debts.

5. Caveat for Chapter 7 Filing

If the spouses do wish to file a joint Chapter 7 before filing for divorce, income qualification can be an issue. In a joint case, both incomes must be considered in order to qualify for the bankruptcy.

If the joint income is too high, the couple may not qualify for Chapter 7. A bankruptcy attorney can help the couple determine the best way to manage the debts. And, divorce settlement agreements can be prepared with the possibility of a future bankruptcy in mind.


An experienced Texas bankruptcy lawyer can help you determine the best way possible to manage your debt and can help address any concerns you have about the interplay between the divorce and bankruptcy processes.

Call the Law Office of Marilyn D. Garner TODAY at 817.381.9292 for a free consultation to discuss how bankruptcy may help you.

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