Should I Postpone My Divorce To File Bankruptcy? That is one of the most common questions I get on a weekly basis.
There is no simple answer to this question. The order in which you address these two major life issues will have a lot to do with your relationship with your spouse, your income, and the distribution of income within the marriage.
The real key is satisfying the Means Test financial analysis. Sometimes it make sense to file bankruptcy prior to getting the divorce finalized. Sometimes it makes sense to have the divorce completed. It is really a “case by case” basis and the unique goals of each person.
The important thing is to meet with a bankruptcy lawyer for free before you make any changes in your marital relationship. That way you know all of your options before you make a decision that may not be able to fix.
If you are on good terms with your spouse, then it may be in your best interest to file for bankruptcy first and work through that issue with the divorce in mind. You can use the bankruptcy to get rid of debts or assets that neither of you wants, such as a house that is underwater or secured debt like a car or boat, that you can no longer afford. You can also choose whether to file jointly or not as long as you are still married. The bankruptcy will take about 90 days, and then you can proceed with the divorce as planned.
You may want to file for divorce first if there is an inequitable distribution of income in the marriage, or if your income is too high to qualify for Chapter 7 bankruptcy. Divorce may enable you to both file Chapter 7 when you would not have qualified before the divorce. Filing divorce first may also enable you to put certain assets beyond the court’s reach during bankruptcy. A divorce allows you to transfer titles and separate joint property so that the other spouse is now protected from creditors and collections. Divorce first is also a better solution for those who will owe support in the form of alimony or child support, since the court will take support payments into consideration during the means test.
Over the past 28 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.
About the Author
Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More