Is It Better to File For Bankruptcy or Divorce First?

 Posted on February 17, 2025 in Bankruptcy

Sometimes life throws more than one challenge our way at a time. Such is the case if you are facing the difficult prospect of having to file for bankruptcy and divorce around the same time. Yet this can happen more often than you would think, given the impact of financial struggles on marriages and the heavy financial toll divorce can take.

From a purely legal standpoint, there are important considerations to keep in mind when deciding whether to file for divorce or bankruptcy first. An experienced Wise County, TX bankruptcy attorney can advise you on your options for filing bankruptcy or divorce, taking into consideration your debt, property, whether your divorce is amicable or not, and other factors. 

How Can Divorce Affect Chapter 7 Bankruptcy?

Because both Chapter 7 bankruptcy and divorce concern the division or distribution of assets, what happens in divorce can affect bankruptcy and vice versa. For example, if a spouse files for bankruptcy some of your joint assets will become part of the bankruptcy estate, meaning that they will not be available for division between the spouses in the divorce. 

Reasons to File for Chapter 7 Bankruptcy First

If your divorce is amicable, there are a number of reasons why filing for the faster Chapter 7 bankruptcy process before divorce can be beneficial. First, you can eliminate several joint debts which will remove them as assets that have to be divided in the divorce, eliminating a source of potential disagreement. These include things like credit cards or medical debts. 

Second, as a married couple, you also qualify for bankruptcy exemptions intended specifically for spouses, which can allow you to save more of your property. Finally, filing together can save costs because you will share attorneys’ fees and administrative costs. 

Reasons to File for Divorce First

Most of the benefits of filing for Chapter 7 bankruptcy work best if you and your spouse are on amicable terms. If you are not, it may be best to file for divorce first and file for bankruptcy once that is finalized. It will be difficult to make decisions together about bankruptcy if you are not on amicable terms. If your situation involves spousal abuse or a complex child support situation, you may also have a better outcome by filing for divorce first. 

What About Chapter 13?

Chapter 7 bankruptcy is a relatively quicker process than Chapter 13 bankruptcy. If Chapter 13 bankruptcy is the best option for you, you may not want to wait to finalize that process (which can take years) before filing for divorce. 

Call a Wise County, TX Chapter 7 Bankruptcy Attorney

If you are facing the prospect of filing for bankruptcy and divorce at the same time, know that the experienced Arlington, TX bankruptcy attorneys at Acker Warren P.C. are available to provide sound legal advice during this challenging time. Contact our offices at 817-752-9033 for a complimentary consultation to get guidance on the impact of your bankruptcy on your divorce.