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Feb
07
Bankruptcy or Divorce, Which Should Go First?

Bankruptcy or Divorce?

It is a sad fact that divorce and financial problems often go hand-in-hand. Financial stresses are one of the top reasons that couples break up. When financial problems rear their head, bankruptcy can be the best resolution. Sometimes the decision to file comes to late and the relationship is beyond repair.

Couples already planning on divorcing often wonder which process they should pursue first, divorce or bankruptcy? The reality is that these are two very different legal processes that often don’t mix well and one should be completed before the other. Ultimately which should go first will depend on the couple, but they should always take the following into consideration.

Bankruptcy Can Save You Money in Your Divorce

For couples that can cooperate, filing bankruptcy before you divorce can be a very attractive option. Instead of spending money on attorneys fees deciding who gets what debt, a joint bankruptcy prior to divorce can alleviate some of the financial strain associated with dividing one household into two and can set both people on the road to a fresh start.

Couples should keep in mind that this option works best when couples can get along enough to cooperate in the bankruptcy filing process. This isn’t always a possibility for all couples. Sometimes there are too many emotions involved and couples are better served by filing independently.

Filing Bankruptcy While A Divorce is Pending

If you decide to file for bankruptcy while you are in the process of a divorce, it could draw out the divorce process. This is not always a bad thing if it saves you money in the long run.

There are also decisions that can be made while your bankruptcy is pending. For example, divorce courts can continue to make decisions affecting alimony and child custody, visitation and support. However, final dispensation of property in a divorce will have to wait until you have received your bankruptcy discharge.

Bankruptcy Will Not Affect Certain Divorce Obligations

If you file for bankruptcy to get out of making payments to your spouse in exchange for property, you may not be off the hook. Although the bankruptcy will prevent the credit card company from going after you, they may go after your former spouse. Your former spouse could take you back to court and you may be ordered to pay the debts.

Certain post-divorce obligations, such as alimony or child support, cannot be discharged in a bankruptcy. Individuals who have past due obligations, often utilize a Chapter 13 bankruptcy to get caught up on child support arrears.

How a bankruptcy would affect your pending divorce depends largely on your particular circumstances. If you are considering divorce or are already in the process of getting a divorce and are thinking about filing bankruptcy, you should contact an experienced Chicago bankruptcy attorney who can review your situation with you and discuss your options.


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In order to provide convenience for clients throughout Chicago and Northern Illinois, we have offices in the following locations: 

Chicago • Schaumburg  • Oakbrook • St. Charles • Naperville • And More

Locations

We have office locations throughout the Chicago Area:

Chicago (Downtown)

Schaumburg

Oak Brook

Naperville


All calls are routed through our Downtown office for your convenience.

Phone: 312-967-3159

Locations

We have office locations throughout the Chicago Area:

Chicago (Downtown)

Schaumburg

Oak Brook

Naperville


All calls are routed through our Downtown office for your convenience.

Phone: 312-967-3159

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