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Navigating Bankruptcy And Divorce Concurrently

Last updated on April 3, 2025

Divorce is a major life event that comes with financial ramifications. In fact, financial struggles are a leading factor in contributing to divorce. As a result, many couples who are facing divorce or separation also face the decision of whether to file bankruptcy.

Can You File For Bankruptcy And Divorce At The Same Time?

Yes, filing for both bankruptcy and divorce concurrently is possible. However, the court could decide to set aside the bankruptcy until the divorce proceedings conclude. Often, couples may choose to go through one process before the other.

For many, there may be a decision to proceed with one process before the other. Whether a divorce or bankruptcy case goes forward first depends on individual factors. For some, filing for bankruptcy and completing that process first seems to be the appropriate strategy. Others may prefer to file for divorce, dissolve the marriage and then file for bankruptcy.

A joint bankruptcy could take place before a divorce, allowing both parties to address their debts. If the couple divorces, the court may divide the debts along with the assets. Then, the newly single individuals may file for bankruptcy after the final divorce decree. For some, dealing with a joint bankruptcy could be the faster, easier option.

Filing For Bankruptcy Before Filing For Divorce

Some couples who are in financial distress may choose to seek help by filing for bankruptcy before divorce. There are some possible financial advantages to doing so.

For example, from a bankruptcy perspective, filing as a married couple may mean that it is easier to qualify for Chapter 7 bankruptcy than to set up a five-year payment plan in Chapter 13.

A married couple may also be able to protect more of their property from sale while still eliminating most, if not all, of their individual and joint debts.

It’s not the best option for everyone, but a well-timed joint bankruptcy petition can ensure that a couple going their separate ways will be able to do so with a fresh financial start.

Filing For Bankruptcy While Divorce Proceedings Are Underway

In other cases, someone who is already subject to a divorce order may wish to file bankruptcy on their own. Doing so may not be a major issue if one’s former spouse agrees with this decision, but such an agreement is not possible in every situation.

Before going forward, it is important for Durham residents who are divorced and have financial problems to understand what bankruptcy can and cannot do for them.

Bankruptcy can go a long way in helping a newly divorced person get their financial affairs in order, but it does have some limitations when it comes to certain divorce-related debts.

For instance, bankruptcy generally will not allow a person to discharge his child support obligations. He will have to pay those in full. Likewise, alimony, by whatever term it is called, is not dischargeable.

Finally, even debts related to property settlement, like equalization payments and the like, may or may not be dischargeable depending on each spouse’s financial circumstances and other factors.

Which Bankruptcy Option Should You Choose While Going Through A Divorce?

Filing for divorce before bankruptcy may seem advisable when the couple qualifies for Chapter 7 bankruptcy. With Chapter 7, all debts are canceled. However, not every couple may be eligible for Chapter 7, as there are income and other possible requirements to meet.

Couples that file for bankruptcy together under Chapter 13 statutes may find their responsibilities commingled. Even if the former couple wants nothing to do with one another, the two individuals may need to deal with Chapter 13 payment plans jointly for some time.

Discussing the situation with a bankruptcy attorney may be advisable for those seeking advice on going forward. Making decisions about bankruptcy may become more complicated when also addressing issues related to divorce. An attorney could assist those struggling with the process.

Get The Support You Need While Navigating Bankruptcy And Divorce

If you’re feeling overwhelmed while filing for bankruptcy and divorcing your spouse at the same time, an attorney can help lessen your burden. At Wootton & Wootton, we understand the financial and emotional struggles that go along with divorce. As bankruptcy lawyers, we have the knowledge and experience to help you get out of debt and put those financial worries behind you.

With our help, you can determine whether you should file for bankruptcy now or wait until you’re divorced to get the best possible financial outcome. We can help you decide which form of bankruptcy is best for your situation.

Planning ahead is critical when it comes to bankruptcy and divorce. By sitting down with one of our attorneys, you can determine the best time to pursue bankruptcy – before, during or after divorce. We will work with you to tailor an approach that best fits your needs.

Talk To A Knowledgeable Bankruptcy Attorney For Free

Have questions about navigating bankruptcy while also going through a divorce? Start today with a free initial consultation by contacting our offices in Durham or Henderson, North Carolina: call 919-794-8660, text us at 919-382-3065 or fill out our online contact form. Consultations are available in person, through the phone or through video conferencing.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.