When marital and money problems arise, filing for divorce and bankruptcy may be necessary to getting a fresh start. Given, however, that divorce and bankruptcy as individual cases can take some time to resolve, knowing which case to pursue first – based on your situation and needs – can be pivotal to realizing the best possible outcomes as you focus on moving on to the next phase of your life.
To clarify when it may be preferable to file for divorce before bankruptcy (and vice versa), below, we have answered some common questions about divorce and bankruptcy issues.
While our answers provide some important insight as to how you can protect your interests in both divorce and bankruptcy, don’t hesitate to contact a trusted Portland divorce attorney at Helzer & Cromar, LLP when you need specific answers related to your circumstances.
Essential Answers about Divorce & Bankruptcy
Q – When is it usually better to file for divorce before bankruptcy?
A – In general, it can be preferable to pursue divorce before pursuing bankruptcy if or when:
- The marriage prevents the spouses from filing for Chapter 7 bankruptcy (because their pooled income causes them to fail the qualifying means test).
- The spouses want to pursue a Chapter 13 bankruptcy case, which can last for 3 to 5 years, and they don’t want to (or cannot) remain married during this timeframe.
- Anyone’s safety is at risk (due to, for instance, domestic violence issues).
Q – Are there times when it’s better to file for bankruptcy before divorce?
A – Yes, there can be some strategic advantages to filing for bankruptcy before divorce. Generally, the major advantage to pursuing bankruptcy before divorce is that it can resolve all of a couple’s debt issues before the divorce case. That can end up meaning that the divorce:
- Proceeds more smoothly, especially when it comes to dividing up the marital property
- Can end up costing less, as there may be fewer (if any) issues to resolve in the divorce case.
There can be additional benefits to pursuing bankruptcy before divorce, such as halting creditors’ efforts to garnish your wages or sue you (whereas if you wait for the divorce to be finalized, creditors can succeed in getting garnishments in place and/or judgments against you).
Q – When divorce is pursued first, will I have to be concerned about the debts assigned to my ex in my subsequent bankruptcy case?
A – Maybe, as you will still be legally obligated to repay those debts if your ex defaults on them. In other words, creditors can still pursue you for repayment (and take additional action against you to try to collect) if your ex defaults on the debt. In these situations, it’s best to consult with an attorney to find out more about your best options for enforcing your divorce settlement or decree.
Ready for More Answers? Contact a Portland Divorce Attorney at Helzer & Cromar, LLP
If you are facing divorce or are dealing with any other family legal matter, you can turn to a Portland divorce attorney at Helzer & Cromar, LLP for aggressive, compassionate representation moving forward.
To find out more about our services and how we can help you, call us at (503) 608-7851 or (866) 930-2812 or send us an email via the contact form on this page. The attorneys at Helzer & Cromar provide the highest quality legal services to clients in Portland and Beaverton, as well as throughout the state of Oregon.