Mountains of unpaid bills, creditors calling for payment and other financial stressors add friction to even the best relationships. For those couples who are already teetering on the precipice of divorce, adding bankruptcy to the mix can be the straw that breaks the back of the marriage.
Read on to learn how to weather the storms of these two crucial events.
Develop a strategy
Now is the time to plot your strategy regarding the marital and financial crises you face. Determining whether to file for bankruptcy separately or together and which case to file first is very important.
There are pros and cons for both decisions, and it’s up to you and your legal and financial advisors to decide which scenario benefits you most.
Couples may save money by filing bankruptcy together
The most obvious reason for filing jointly is that you can save money. Rather than paying two attorneys and double filing fees for separate bankruptcy actions, couples can pay only once.
There may be other reasons to file for bankruptcy as a couple. For instance, New York permits couples who file together to double the exemptions they can claim. This can be pivotal for those couples filing under Chapter 13, as they may be able to keep more assets that way. As there are also tax implications, this angle must also be examined closely.
Has your relationship deteriorated too far to work together?
This is one common reason for filing for bankruptcy after the divorce. If you can’t agree on even the most basic marital issues now, it may be highly unlikely that the two of you can cooperate on a complex decision like filing for joint bankruptcy.
Since these two decisions will affect both spouses’ lives now and also in the future, they should only be made after a thorough study of the options available to you both.