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Managing divorce and bankruptcy together

On Behalf of | Dec 28, 2017 | Family Law |

Whether a couple in Nebraska contemplates divorce at the end of the year amid the holiday shopping season or at any other time, financial issues may well rear their heads as part of the marital troubles. Money is not simply something that married people fight about but it can be something that contributes to the end of the marriage. If the financial challenges are severe enough, consideration may be given to filing for bankruptcy as well as for divorce.

Depending on the circumstances, some couples may be better off filing for a joint bankruptcy and then getting divorced while other couples should put divorce ahead of bankruptcy. According to My Horizon, one factor that should help determine which comes first is how well the spouses can actually work together. Filing a joint bankruptcy will require some level of cooperation and if this is impossible, then divorce should be the number one priority.

Also to be reviewed are the couples assets and income as this will provide direction on what type of bankruptcy plan is best for their situation. If, for example, a Chapter 13 bankruptcy is desired because it can help one spouse keep the family home, this again may be best held until after the divorce. Chapter 13 plans last up to five years making them not ideal for spouses trying to go their separate ways.

The Balance explains that for people who may benefit from a Chapter 7 bankruptcy, they may be able to increase their exemption amounts which can help them save more of their assets. This type of plan may be filed jointly and completed in just a few months.