Should I Declare Bankruptcy Before or After My Divorce?

Should I Declare Bankruptcy Before or After My Divorce?

Divorce and bankruptcy tend to go hand in hand. While facing one is challenging enough, it’s important to remember that you’re not alone if you happen to be facing both.

Regardless of whether financial issues contributed to the breakdown of your marriage or you’re merely finding it hard to make ends meet following the separation, there are ways to regain your footing. If you have an overwhelming amount of debt, one of the most viable strategies may be bankruptcy.

Since you can’t pursue divorce and bankruptcy simultaneously, though, you’ll have to decide which to file first. Naturally, the best approach will depend on your specific situation. For some general information on the subject, however, read on:

When to Consider Bankruptcy First

As long as you and your spouse are willing to cooperate, discharging applicable debts through bankruptcy could streamline the subsequent divorce proceedings. Since the bankruptcy will eliminate various liabilities, you won’t have to worry about dividing them during the divorce. What’s more, if you file a joint petition, you’ll get certain benefits, like double some exemptions.

Keep in mind, however, that a Chapter 13 filing could end up complicating the divorce proceedings. Whereas Chapter 7 proceedings are typically resolved within a matter of months, chapter 13 bankruptcy requires the implementation of a three- to five-year repayment plan. Naturally, this plan will have to be modified during the divorce if it’s something you and your spouse entered into jointly.

When to Consider Divorce First

There are several scenarios in which dissolving your marriage prior to declaring bankruptcy is advantageous. If you don’t want to liquidate nonexempt assets to pay back creditors, for example, it may be wise to wait until after the divorce has been finalized so you can pursue Chapter 13.

You may also have to wait until after the divorce if you wish to pursue Chapter 7 but your household income affects your eligibility. Before you can declare Chapter 7 in Mississippi, you must pass a means test. Generally speaking, your household income cannot exceed the state’s median income for a household of the same size.

When Should I Call a Bankruptcy Lawyer?

It’s wise to consult a bankruptcy attorney as soon as you realize discharging debt may be in your best interests. Even if you intend to file for divorce first, a successful bankruptcy takes months of preparation.

For example, did you know you must stop using your credit cards for anything but essentials? In Mississippi, luxury purchases made up to 90 days prior to filing are not dischargeable.

Likewise, you’ll have to be careful about gifting assets to loved ones. Even if you were already planning on doing so, transferring assets before filing a bankruptcy petition could be considered fraud.

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For help with your bankruptcy petition, turn to Brown Bass & Jeter, PLLC. We never judge our clients for their financial failings. Instead, we strive to help them regain their footing so they can move on with their life. Call 601-487-8448 or fill out our Contact Form to schedule a free consultation with a bankruptcy lawyer in Jackson.

Katrina S. Brown

Katrina S. Brown


Katrina Brown is a highly sought-after trial attorney, known for her courageous spirit and genuine desire to seek justi[...]

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