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Exercise care when balancing bankruptcy and divorce

Maryland spouses who are contemplating divorce but also struggling with serious debt may logically wonder if filing for bankruptcy is a good option for them. In addition, they may want to determine the best timing for a bankruptcy relative to their divorce to know which should come first. 

Bankrate indicates that this decision should not be made lightly for several reasons. Even when still married, a person can file for a solo, not joint, bankruptcy. If that happens and that person is able to eliminate their responsibility for some debt that was in both people's names, that may leave the other spouse on the hook for the debt.

A joint bankruptcy prior to getting divorced may allow both spouses to get out from under an otherwise insurmountable level of debt. However, as My Horizon Today explains, not every divorcing couple may be able to work effectively together in the way that may be needed when getting a divorce. Determining whether or not spouses can collaborate on a bankruptcy may help them to determine when to file for bankrupty and divorce.

Another consideration is what type of bankruptcy is best for either the couple together or one spouse alone. Chapter 7 plans and Chapter 13 plans differ in many ways and understanding the amount of debt, the type of debt, the income of the parties filing for bankrupty and the total and type of assets held will all play into the final decision about the right type of plan. A Chapter 7 bankruptcy can be completed in far less time than can a Chapter 13 bankruptcy.

 

 

 

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