It is a known fact that money and financial challenges are commonly at the heart of many marital arguments and may even be significant contributors in many Illinois divorces. Couples who face serious problems with finances may consider also filing for divorce as they get divorced. However, knowing whether to file for bankruptcy first and then divorce or vice versa is not always easy. My Horizon Today explains that there are several factors to review before making this decision.
One advantage of filing bankruptcy before divorce is that spouses will only have to pay one set of legal and filing fees. However, there are income level thresholds that must not be exceeded for Chapter 7 bankruptcies. If a couple’s dual income is greater than the allowed amount and they wish to file for Chapter 7, they will need to consider separate filings after their divorce is finalized.
In general, Chapter 13 bankruptcies may be best saved for individuals after divorces are done because of the length of time that they last. A Chapter 13 bankruptcy can keep a couple tied to each other financially for up to five years. How amicable spouses are able to be leading up to and during a divorce could be a good indicator of whether or not a Chapter 13 before a divorce is a wise route to take.
Bankrate advises couples to also factor in the ability to discharge jointly acquired debt. If any joint liability is wished to be included in a bankruptcy, that bankruptcy should be filed before a divorce commences.