Divorce and Bankruptcy

Oftentimes a divorce and bankruptcy happen at the same time. Was it the financial stress that caused the breakdown of the marriage?  Was it the breakdown of the marriage that caused financial stress? Likely, it is some combination of the two that create tension and stress. Many couples who find themselves in this situation wonder if they should file for bankruptcy or divorce first. Many couples wonder how a divorce will affect child support or alimony. While every situation is unique, knowing what options are available can help you understand your rights and make legally sound choices. Contacting an experienced bankruptcy and family law attorney can assist you in making the best choices for your situation.

Should You File for Divorce or Bankruptcy First?

Should you file for divorce or bankruptcy first? This is a common question asked as couples face these tumultuous life events. It is important to understand that bankruptcy is specific to you personally and affects your credit report and social security number. Essentially, your bankruptcy does not impact your spouse’s financial situation or their credit report. You do not need spousal consent to file bankruptcy unless you are filing jointly. Bankruptcy can be filed prior to a divorce, however, it can create a great deal of legally complex issues, including whether or not an Automatic Stay is imposed on the finances.

Filing Bankruptcy Jointly Before Divorce

If you decide to file bankruptcy jointly it can be more efficient and also dismiss and discharge the debt of both spouses, meaning that it will not be debt they need to divide in the divorce proceeding.  The cost of a joint bankruptcy is also less to file than it is separately.  If couples feel a need to file for bankruptcy and are able to do so amicably before the divorce process, it can remove a large portion of debt that both would otherwise owe. Additionally, because the issue of debt and finances has been decided before the divorce through bankruptcy, it can save both parties a great deal of money on attorneys, as this issue will not be contested and is already decided.

Filing Bankruptcy in the Middle of a Divorce

If a spouse decides to file for bankruptcy in the middle of a divorce case, the family court will then wait and receive permission from the Bankruptcy Court regarding how the family home, pensions, stocks, and other assets will be divided. Ultimately, consulting with an experienced bankruptcy attorney can help you understand what options are best for your unique situation.

Can a Spouse Escape Paying Child Support or Alimony by Declaring Bankruptcy?

If an ex-spouse decides to declare bankruptcy, any family support, child support or alimony will be considered non-dischargeable by the Bankruptcy Code. This means that under all conditions, child support and alimony payments will continue if the other party declares bankruptcy. In fact, an Automatic Stay (which stops all creditors, foreclosures, garnishments, etc.) does not apply at all to child support or alimony. These types of debts and obligations are considered a priority under the law, and will always be required to be paid, under Section 523(a)(5) of the Bankruptcy Code.

Contact an Experienced Bankruptcy Attorney

If you find yourself attempting to decide whether to file for bankruptcy or divorce first, you should know your legal options. Both bankruptcy law and divorce laws are incredibly complex, especially when working simultaneously. Knowing which options to choose can literally change the course of your financial future. Before you file for Chapter 7 or Chapter 13 bankruptcy, and before you file for divorce, serious consideration should be given to discussing your situation with an experienced bankruptcy attorney to understand your rights and options. Contact the bankruptcy attorneys at ​Silverberg Law Firm LLC at 1-201-252-7000 or online for a free consultation today.

Speak to our experienced attorney about your case; and we’ll provide you with the best solution possible.

At Silverberg Law Firm LLC our team will analyze your case and determine that whether bankruptcy is the right option for you. If yes, then we will handle every aspect of your legal process, start to finish.

We will provide you with:

  • Professional Assistance
  • Strong Legal Representation
  • Quality Guidance
  • Attention

Which will help you make the right choice, and get out of debt smoothly, and fast.


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New York Bankruptcy Lawyer Jay Silverberg

Our firm proudly practices bankruptcy law and is considered a debt relief agency under federal law. We help people file for bankruptcy relief under the United States Bankruptcy Code.

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