Dissolving a North Carolina marriage and filing bankruptcy is not easy. These complicated legal matters can pose additional challenges to each spouse.
There are many reasons to file for bankruptcy before filing for divorce.
Streamline divorce process
Experian acknowledges the fact that filing for both bankruptcy and divorce at the same time complicates the legal proceedings. Addressing bankruptcy first, though, can help streamline the divorce by helping separate assets and expenses. Doing this before divorce means less time negotiating these items in family court.
Many joint marital debts cancel under a joint Chapter 7 bankruptcy leaving less to discuss during a divorce. Keep in mind that spouses must work together during the bankruptcy process to file jointly. The time and money savings of a joint bankruptcy prior to divorce can add up.
Common joint benefits
The National Law Review states that joint bankruptcy filers can take advantage of double exemptions. These allowable exemptions can help couples keep more of their items as they prepare for life apart following the bankruptcy and subsequent divorce.
Filing for Chapter 7 bankruptcy before a divorce can take less time than a Chapter 13. Not to mention that spouses who have their debt cleared do not have to worry about the other spouse maintaining the agreements after divorce.
Some debts are not exempt from bankruptcy discharge such as alimony and child support. Since these debts stay with the individual after bankruptcy, they should not be a hindrance upon filing before the divorce. Waiting until after the divorce does not eliminate any obligations for child support or alimony awarded to the other spouse.