Divorce and Bankruptcy
How Do Divorce And Bankruptcy Work Together?
People sometimes divorce because of financial problems of one or both spouses.
Sometimes it makes sense to file a joint bankruptcy to clear out debt before filing for divorce. Once creditors are taken care of, the divorce becomes easier to handle. Also, it may be easier to pass the new Bankruptcy Means Test by using a larger family size.
Other times, it may make sense to have the divorce come first. Child support is a useful expense in bankruptcy. The former spouse's income would not become part of the bankruptcy budget and we could argue it should not be counted for the Bankruptcy Means Test.
Sometimes a fiance wants to file the bankruptcy before they get married so he enters the marriage with a clean slate. .
My office is very familiar with marital issues in bankruptcy.