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What are the advantages of filing for bankruptcy during divorce?

On Behalf of | Jan 12, 2023 | Firm News

Many times, couples in the Miami area who have relationship problems also are having financial problems. What to do about overwhelming debt could become a significant issue in a Florida couple’s divorce as a result.

There is no hard and fast rule against not filing for bankruptcy during a divorce. How to handle the timing of these two legal proceedings will depend a lot on a couple’s financial and personal circumstances.

Someone whose relationship is heading for divorce and who also has financial problems should review their situation and discuss their options with an experienced legal professional.

However, there are some general issues couples who are thinking about bankruptcy and divorce should consider.

A joint bankruptcy filing may offer a couple some financial advantages

If a couple remains married, they may file a joint bankruptcy petition. This offers several advantages. They only have to pay one filing fee and may be able to use the same attorney. They also may be able to take advantage of combining their exemptions so they can keep more of their property instead of having to sell it during the bankruptcy to pay off their creditors.

At the end of the bankruptcy, the couple should get a discharge from most of their debt. A discharge could make the couple’s divorce much simpler since they will not have to decide who will pay discharged debts. On the other hand, filing a joint bankruptcy petition before divorcing requires that the spouses still have some ability to trust each other and to get along.

There are some situations where it is really better for spouses to go their separate ways financially before filing for bankruptcy. Furthermore, there are some situations in which filing jointly could mean that the couple would not be able to qualify to file a Chapter 7 bankruptcy. They would have to opt for a Chapter 13 repayment plan.


Kingcade & Garcia | A Miami Law Firm