Helping You Resolve Difficult Issues In Family Law

Divorce and bankruptcy: Here’s what you need to know

On Behalf of | Jan 13, 2021 | Property Division

Divorce can be one of the toughest parts of life for people in Arizona and across the nation. Everything from emotional to financial hardship tends to occur during this time, which is exacerbated if one or both spouses is considering filing for bankruptcy due to debt. Both parties want to get the divorce process out of the way, but some may want to get their finances in order before ending the marriage. Read on to learn in greater detail about bankruptcy vs. divorce and which process you may want to undergo first.

Do not file for both bankruptcy and divorce at the same time

As great as a multi-tasker you think you are, it’s never a good idea to file for both bankruptcy and divorce at the same time. The biggest reason, other than less workload, for avoiding divorce and bankruptcy simultaneously is that your assets are likely to be frozen during a bankruptcy. This means that it can be practically impossible for asset division to take place during your divorce case. It should also be noted that your divorce attorney will not be able to work with you if you or your spouse suddenly files for bankruptcy during a divorce as they are legally barred from doing so.

Should bankruptcy come first?

The answer to this question is that it depends on the type of relationship you have with your former spouse. If things are okay, then it is recommended to file for bankruptcy first. This will allow you to share any attorney fees and openly communicate about assets you may want to get rid of.

If you choose to seek divorce first, then it is important to consult with an attorney as soon as possible. They may provide you with guidance about the legal routes that are suitable for your situation.