Does Divorce Affect You When Filing Bankruptcy?

Filing divorce can stress out anyone. Preparing for a divorce in the midst of filing bankruptcy may seem like it would bring even more stress into your life, but this process can be extremely beneficial for both spouses, especially when filing a Chapter 7 bankruptcy. Chapter 7 bankruptcy allows you to erase most, if not all, of your unsecured debt. The court costs and fees associated with divorce send a fair amount of people to RGG Law’s door already, and we help them with filing bankruptcy. But filing jointly beforehand might be the best option for some couples.

Benefits of Filing Jointly

As a married couple, you will get the opportunity of filing bankruptcy jointly. Chapter 7 bankruptcy liquidates all of your unsecured debt. This means that both spouses, once filing bankruptcy, have fewer assets and less debt. This reduces the added stress that debt can bring to people, but it also makes the process of divorce easier. Divvying up debts and assets prolongs the frustration of the divorce process and, more importantly, increases lawyer fees and court costs.

Filing bankruptcy as a couple allows both parties immunity from their spouse’s debt. In marriage, one spouse’s debt becomes both spouses’ debts. Divorce proceedings do not remove the responsibility for debt from either spouse; it only acts to assign the payments to one individual. If your ex-husband or ex-wife chooses not to pay back that debt or chooses to file bankruptcy as an individual, creditors will come to you. However, when you file bankruptcy jointly, creditors cannot ask you to pay the debt at any time, before or after divorce proceedings.

Missouri Property Exemptions

Some states offer added benefits in the form of exemptions to couples filing before they get a divorce, however, Missouri does not. In Missouri, individuals and couples receive the same $15,000 exemption their home and property. So if you own pricey property, it might be in your best interest to file bankruptcy after the divorce. This way, you get a $15,000 exemption for yourself instead of splitting it with your spouse. This is much better than splitting that exemption with someone you will no longer have a relationship with.

Filing Bankruptcy with RGG Law

Don’t let divorce pull you even further into debt. Filing bankruptcy can alleviate the financial hardship and make divorce proceedings more cordial and simpler. A simpler divorce equals a cheaper and faster divorce. Let RGG Law help you with you Chapter 7 bankruptcy today.