It’s not uncommon for those who have decided to file for divorce to find themselves struggling financially, as well. If you’re thinking about ending your marriage, a seasoned divorce attorney can explain the potential financial outcomes of doing so. And if you plan on declaring bankruptcy regardless of the terms of the separation agreement, a lawyer can help navigate those proceedings, too. Whether you should file for divorce or bankruptcy first will depend on the circumstances, but there are some generalities that may apply. 

If You Want to Declare Chapter 7

If you plan on declaring chapter 7 jointly, you will have to do so prior to filing for divorce. If only one of you plans on declaring bankruptcy, on the other hand, it may or may not make sense to do so before ending the marriage. Fortunately, a seasoned divorce attorney can explain the ramifications of each approach after evaluating the situation. 

If you’re both in financial trouble, for example, filing jointly may allow you to take double the exemptions. In other words, you will retain ownership of more assets during the liquidation stage. As for one or both of you filing individually, the bankruptcy proceedings will still simplify your financial situation as a couple. This, in turn, will streamline the divorce proceedings, making it easier to devise a reasonable separation agreement. 

If You Want to Declare Chapter 13

If you are not eligible for chapter 7, a divorce attorney may advise you to wait until after the marriage has ended to file for chapter 13. Also known as “reorganization bankruptcy,” chapter 13 requires debtors to devise a three- to five-year payment plan to repay what they owe. That means if you and your spouse file jointly, you will have to modify the payment plan during the divorce proceedings, which will only serve to complicate things. 

If you file individually while still married, your spouse’s earnings will still play a role in the terms of the repayment plan. Since your household income following the divorce may be lower, this could set you up for failure when it comes to making those monthly payments. Therefore, it may be best to wait until after the divorce has been finalized to declare chapter 13. 

If you’re planning on filing for divorce and bankruptcy, get in touch with Lane, Felix & Raisbeck CO, LPA to discuss the situation. Located in Cincinnati, OH, this firm has been counseling individuals and businesses throughout Hamilton County for more than three decades. They strive to build a lasting relationship with every client. To explore all the services they provide, visit their website. To get in touch with a divorce attorney on their team, call (513) 922-7700.