Divorce before bankruptcy or divorce after bankruptcy?

[barbhill]

Is it better to settle a divorce, then claim bankruptcy, or claim joint bankruptcy, then settle the divorce?

I am currently separated from my husband. He has filed for divorce, but no settlement has been made.
We are hugely in debt, both personal and business debt. We owned an incorporated small business together that he walked away from.

He has retained a bankruptcy attorney, and has begun the proceedings for chapter 7, I believe.

Can he do this while we are still technically married? What happens to joint debt? Does only half of it get dissolved? What happens to the marital debt that is in my name only?


I've been told that if he claims bankruptcy, more than likely, I will have to, also. I'm not in a position to take on the full burden of the debt. I have been forced to shut down the business, and take a job for about half the pay I was making in the business.

[Drazil65]

Hi and welcome, I am so sorry for all you are going through. This is a great place to find support and answers. I think I would suggest that you make a couple of appointments with bankruptcy attorneys in your area. Whether you file or not you need answers and the best thing you could do I think is start there. The consults should be free, ask them alot of questions and at least find out your options. Filing bankruptcy may not be a bad idea given the facts but you will not be able to make an informed decision without knowing your options. The more you know the better you will feel. I am sure others will chime in with suggestions as well and take some time to read as much as you can here on this forum. Keep us updated and ask any questions you need to. Good Luck!

[justbroke]

This is a very strategic question and involves actually working with both the divorce and bankruptcy attorneys! if you file together, would you be able to do a Chapter 7? Otherwise, are you better off doing separate bankruptcy filings after the divorce (as individuals)? Or, is it better to have individual bankruptcy filings while married? All of these are strategic questions.

Remember, that he terms of the divorce would still be enforceable so even if one party discharged the debt, they could still be liable under the final divorce decree. Something to think about.

It's a strategy and it requires some forethought. Otherwise, you could get into post-divorce issues and back in court arguing over whether debt was discharged or decreed as marital or non-marital debt.

In the end, if one files, you both should file if you have joint debt. This is because you live in Florida which is not a community property State. The liability for joint debts could come back to haunt you if you don't file. Since he is filing Chapter 7, you may want to do the same thing.

Personally, and aside from everything I wrote above, I think it's better to discharge all the debt before the final divorce decree so that the "debt" part of the divorce is as tidy as possible. Just my opinion.

[btbeme]

If he files, you will almost certainly have to file; otherwise, any joint debts will get hung around your neck.

Before or after divorce? Depends, but I would say that "before" would make the divorce a lot easier, since all your assets are already laid bare in the BK. I do know that most attorneys won't even talk to you about the other process if you are already involved in one of them.

One last word. I say this as a friend... BK and divorces tend to make smart people go a little crazy sometimes. Nobody - NOBODY - should have to go into divorce court to have to listen to a former friend or relative tell the judge about an asset, etc that you are hiding, especially if it isn't true. And, I guaran-damn-tee you that having a former "friend" writing a note or otherwise "tipping" a BK Trustee about "something being hidden..." would be a bad day indeed. And it does happen, all the time. So please be thorough and transparent in your filings - there be sharks in these waters.