Money problems and marriage problems often show up together. When a divorce is on the table and the debt is piling up, a common question is whether bankruptcy should come first, after, or not at all.
There’s no one-size-fits-all answer. But understanding how bankruptcy and divorce affect each other can help you avoid expensive mistakes and protect yourself as you start over.
Filing Bankruptcy Before the Divorce
Filing before a divorce is filed can make sense in some situations.
Possible advantages:
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A joint filing can wipe out shared debt. If you and your spouse both owe on credit cards, medical bills, or other joint debt, a joint case can address it in one filing, with one set of fees.
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Less to fight over. When joint debt is discharged, the divorce can be simpler because there’s less debt to divide.
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Cooperation is easier now. A joint case requires both spouses to work together and share financial information. That’s often easier before the divorce than after.
Possible drawbacks:
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Your household income, based on both spouses, may make it harder to pass the means test for Chapter 7. Our page on whether you qualify for bankruptcy explains how eligibility works.
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The bankruptcy may slow down the division of property in the divorce (more on that below).
Filing Bankruptcy After the Divorce
Waiting until the divorce is final can make sense too.
Possible advantages:
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Your income counts alone. After a divorce, eligibility is usually based on your own household, which may make Chapter 7 more realistic.
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You know what you’re responsible for. The divorce decree will spell out which debts are yours.
Possible drawbacks:
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Creditors aren’t bound by your divorce decree. If your ex agreed to pay a joint credit card but doesn’t pay, the creditor can still come after you. If your ex files bankruptcy, you may be left holding joint debts.
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Some divorce-related debts can’t be discharged in Chapter 7 (see the next section).
Debts Bankruptcy Won’t Erase
Under federal bankruptcy law:
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Domestic support obligations can’t be discharged in Chapter 7 or Chapter 13. That includes child support and alimony (maintenance).
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Other debts owed to a former spouse under a divorce decree, like a property settlement payment or an agreement to pay a shared credit card, generally can’t be discharged in Chapter 7.
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In Chapter 13, those non-support property settlement debts may be dischargeable after you complete your plan. That difference is one reason some people choose Chapter 13 after a divorce. See our overview of Chapter 13 bankruptcy to learn how it works.
Does Bankruptcy Stop a Divorce?
Not completely. The automatic stay, which stops most collection actions when you file, does not stop:
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The divorce itself (dissolving the marriage)
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Child custody and visitation cases
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Cases to set or modify child support or maintenance
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Collection of domestic support from property that isn’t part of the bankruptcy estate
However, the stay can pause the part of the divorce that divides property belonging to the bankruptcy estate. That can delay the final property split until the bankruptcy court says it can move forward.
Protecting Yourself During the Process
A few tips if you’re facing both:
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Pull your credit report so you know every debt in your name. Our post on what your free credit report is saying about you shows how.
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Don’t run up joint cards or move money around before filing.
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Tell your divorce attorney and your bankruptcy attorney about each other so they can coordinate.
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Update your estate plan once the divorce is final. Your ex may still be listed as a beneficiary or agent. Our Divorce and Legal Separation life stage page explains what to update.
Talk to a Bankruptcy Attorney Before You Decide
Bloom Legal Advisors represents bankruptcy clients in Kansas and Missouri, including Overland Park, Olathe, and Lenexa. We don’t handle the divorce itself, but we can work alongside your family law attorney to time the bankruptcy so it helps you rather than hurts you.
Ready to talk it through? Schedule your bankruptcy consultation or call (913) 954-5151.
Frequently Asked Questions
Is it better to file bankruptcy before or after a divorce?
It depends on your income, your joint debts, and how well you and your spouse can cooperate. Filing jointly before a divorce can wipe out shared debt, while filing after may make it easier to qualify for Chapter 7.
Can child support or alimony be discharged in bankruptcy?
No. Domestic support obligations, including child support and alimony, can’t be discharged in Chapter 7 or Chapter 13.
Can I discharge a property settlement from my divorce in bankruptcy?
Generally not in Chapter 7. In Chapter 13, non-support property settlement debts may be dischargeable after you complete your plan.
Does filing bankruptcy stop a divorce?
No. The divorce, custody, and support matters can continue. The automatic stay may pause the division of property that belongs to the bankruptcy estate.
If my ex agreed to pay a joint debt and doesn’t, can the creditor come after me?
Yes. A divorce decree doesn’t change your contract with the creditor. If your name is on the debt, the creditor can still try to collect from you.
