It’s no secret that when money gets tight in a marriage, couples tend to bicker and fight a lot more. It can become a bit of a “chicken or the egg” conundrum, but the end result can often be that couples find themselves filing for both divorce and bankruptcy simultaneously.
But before drafting either kind of petition, it’s important for both spouses to review all their options and proceed strategically to derive the best outcome from both processes.
An unenviable position
To be sure, no one ever wants to file for either. Both can cause a great deal of stress on both spouses. But it is possible to make strategic decisions if you work together and are guided by good legal counsel.
Which should be filed first?
It might be cheaper to file for bankruptcy jointly as a couple before filing for divorce. For instance, there will be one set of legal fees to file a joint bankruptcy and wipe out your marital debt.
Married couples also often have greater protection for a larger share of their jointly owned assets as opposed to individuals who file singly.
Is it ever wise to file for divorce first?
It could be, especially for higher earners who would not otherwise qualify for Chapter 7 due to the income restrictions. If one spouse is a much higher wage-earner than the other, by divorcing first, the spouse who earns less could potentially qualify individually to file under Chapter 7.
Learning more about the rules governing both divorce and bankruptcy here in Tennessee can help you make an informed decision.