Many couples contemplating divorce or in the process of getting divorced are saddled with debt and want to begin their new lives with a fresh start. Bankruptcy is frequently a part of the ‘starting over’ process. Married partners often carry joint debt, from credit cards to personal loans, car loan and mortgages. Does it make sense to file for a chapter 7 discharge together while you still can (since only married couples may file jointly and avoid the cost of filing separately)?
It depends. Filing jointly before a divorce is filed (or before it becomes final) eliminates one bone of contention in a divorce proceeding: who bears which debts? What’s left is custody of any minor children of the marriage and division of marital property, known as equitable distribution. If you are still communicating with your spouse and want to simplify and reduce the conflict in a divorce, a joint filing can make excellent sense. Rather than fighting over who pays the credit cards, etc., a chapter 7 discharge makes that issue irrelevant.
So, the benefits include reduced case cost (1 case instead of 2), shared cost (each party contributing to the attorney’s fees and court filing fees), bringing down the ‘temperature’ in the divorce by eliminating this potential source of conflict, and speeding both parties’ financial fresh start.
Call me for a free consultation to discuss this process and how it can help you as you face starting over.