LawFinancial issues are a leading reason for couples to divorce in about 25% of all divorces, according to the Austin Institute, a family research group. For couples already in financial trouble, getting a divorce can make money matters even worse. Sometimes it is a good decision to delay the divorce for a while and file for bankruptcy as a couple first.

Save by Filing Together

It is going to cost the same to file for bankruptcy as an individual as it would to file as a couple. If a couple knows that one or both is definitely going to file for bankruptcy after the divorce, it could end up saving both partners a substantial amount to file together. Sometimes a family lawyer handles divorces and bankruptcies, and this can make working together much more comfortable.

Filing for bankruptcy together can also double the amount of property that can be protected, so filing together can make really good sense if there is a lot of property owned jointly. Divorce also does not end the responsibility of debts that were taken on during the marriage. For example, if the husband assumes a large amount of credit card debt during the marriage, collection agencies can still collect the debt from his spouse even after the divorce.

Bankruptcy Types

It is also important to consider which type of bankruptcy will be filed.  A chapter 7 bankruptcy requires the following information:

  • Creditors and the type of claim
  • Income source
  • Property
  • Monthly expense list.

Even if filing separately, the spouse’s contributions to this list must also be included. The time it takes to file and discharge a chapter 7 bankruptcy is much lower than a chapter 13 bankruptcy, so it may not be useful for a couple planning on divorce to choose a chapter 13 bankruptcy together.

Filing for bankruptcy and divorce are both decisions that nobody wants to make. With divorce rates stuck around 50% and bankruptcy rates well above average in Illinois, many couples around Chicago may face these tough decisions at the same time.  When one or more of the partners in a marriage is in financial trouble, the couple should consult a family lawyer with experience in bankruptcy. Sometimes deciding to stay together for a few more months to finish a bankruptcy proceeding can save both partners a lot of money.