If asked to list life’s most stressful challenges, divorce and bankruptcy would each be at the top of most people’s lists, so the thought of going through both at the same time is truly overwhelming. Still, despite the emotional and financial strain, handling bankruptcy and divorce simultaneously is sometimes necessary, and can be done — but it requires careful timing, a well-planned strategy, and strong organizational skills. More than anything, getting through the process and successfully protecting the best possible outcome requires the help of an experienced attorney.

The first thing you need to understand is that you can’t really do the two at the exact same time. Bankruptcy and divorce are handled in different courts, with divorce cases being heard in the state and county family courts and bankruptcy cases managed by a federal court. Still, one case can definitely have an impact on the other. For example, a bankruptcy filing can temporarily pause (or “stay”) the division of marital property in a divorce until the bankruptcy process has been completed. That’s why many couples — and especially those who have significant joint debt — opt for waiting to finalize their divorce until after they’ve filed for bankruptcy.

In the midst of a messy and challenging situation, filing for bankruptcy first can simplify the divorce process. When joint debts on credit cards, personal loans, or medical bills are discharged in a bankruptcy,  each spouse can start their new life with a clean financial slate. Approaching the situation this way also prevents one spouse from ending up responsible for the other’s debts later.

On the other hand, there are situations where filing for divorce first makes more sense. If a couple’s combined income is too high to qualify for Chapter 7 bankruptcy, separating first might make one or both parties eligible to file individually afterward. Similarly, if property issues are complicated by things like a jointly owned business or real estate, addressing those in divorce court first may be the smarter way to go.

In some cases, couples don’t have the luxury of putting off one process until the other is finished. When that happens, coordination between each partner’s family law and bankruptcy attorneys is essential. A skilled legal team can help anticipate and address overlapping issues such as child support, alimony, and property division—all of which are treated differently under bankruptcy law.

For more information on this and any other legal issues involving divorce, bankruptcy, or both, contact us today.