Bankruptcy And Divorce

Posted by Col Ovik on November 21, 2021 at 5:30 AM
Col Ovik

shutterstock_1043592691A bankruptcy and a divorce are both intensive processes that require a lot of financial disclosures. When trying to determine which process to start first an individual needs to consider their own unique situation. 

Attempting to proceed with both the divorce and the bankruptcy concurrently is generally not recommended. The bankruptcy filing does issue an automatic stay that places a hold on assets and will likely impact the divorce proceeding. 

A divorce either through a settlement agreement or a court ruling will determine what each individual gets to retain post-divorce, and what obligations each individual will continue to be liable for going forward. Some factors that may impact how to proceed include:

  1. Will your spouse be filing bankruptcy with you/do they need to file with you (do they have their own debt).
  2. What chapter bankruptcy will you be filing. A chapter 13 bankruptcy has a commitment period of 3-5 years and is likely not practical for a divorcing couple when filing together.
  3. Are there any pending or existing garnishments
  4.  Are the assets protected by the available statutory exemptions. This is an important analysis. Divorce settlements do not have a specific statutory exemption. 

If the debt is overwhelming, initiating a bankruptcy proceedings first is a feasible way to eliminate debts.  

Also, filing for bankruptcy removes the chance that an individual could be responsible for a debt post-divorce that was assigned to the other spouse as part of the Decree. Because, regardless of the language in the Decree, nothing prevents a creditor from pursuing an ex-spouse even if it was agreed per the divorce agreement they would no longer be liable for the debt. 


When it comes to divorces and bankruptcies there are strategies and benefits to filing one before the other. The analysis for which one to commence first is unique to each couple or individual’s case. Contact the attorneys at LifeBackLaw and see us at  and let us help you get your life back.

Topics: Divorce, bankruptcy payments

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