Divorce isn’t easy on your finances. If you were already barely making ends meet as a couple, it’s hard to see how you can manage to support yourself on only one income. It could be even worse if you’re likely to have to pay child support once your divorce is over.
Is bankruptcy the answer? Maybe, but you need to consider the timing of your divorce and your bankruptcy carefully. Here are some questions you need to ask yourself:
- Do you and your spouse have joint debt? If your spouse’s name is on any of your credit cards or your spouse co-signed a personal loan for you, they may become liable for the total debt if you file for bankruptcy. You don’t want this to come as a shock and sour your divorce negotiations.
- Is your spouse also planning to file for bankruptcy? If so, you may want to file for bankruptcy together before you file for divorce. Doing so helps you share the cost of the filing fees, allows you to work together to collect all the financial information needed to file the bankruptcy petition and may allow you to take advantage of higher exemptions on your personal property.
- Will your joint income put you over the Chapter 7 threshold? To qualify for Chapter 7, you have to pass a means test. If your income is greater than the average income of a household of the same size, you may have more difficulty qualifying. If you’re obliged to go with a Chapter 13 bankruptcy, your financial ties to your spouse may cause your divorce to drag on uncomfortably long.
Deciding to file for bankruptcy can be a difficult decision — just as filing for divorce is. Talk to an experienced attorney about your options today.