Lack of money and increased marital problems often go together. 25% of couples experiencing separation or divorce cite financial difficulty as the #1 cause. When money is an issue, tension, and arguments in a relationship increase. Sadly, couples are fighting over a credit card or medical bills, gambling debts, IRS deficiency, overdue loans, eviction, and foreclosure notices when many of those issues could be resolved by a bankruptcy filing.

Consider saving your marriage by filing either Chapter 7 or Chapter 13 bankruptcy. Get rid of your debt. Don’t be a statistic.

If you are considering divorce for other reasons, or if your marriage can’t be saved, consider filing together so you can have a “cleaner” divorce. You probably don’t want to pay lawyers to divide up debt -that’s adding insult to injury. If you are still on good terms and can work together, you may be able to file a joint Chapter 7 bankruptcy to have as many of the family debts discharged before the divorce as you can. This is especially critical if you have children, as financing 2 households instead of 1 household can cause financial stress as well.

Married couples can file for bankruptcy jointly, meaning all their collective debts and assets are considered together and you get DOUBLE the amount allowed for exemptions and keep DOUBLE the assets. For example, in Connecticut, where home prices are high, you may keep equity in your home of up to $150,000 in a joint filing or $75,0000 for a solo filing in both Chapter 7 and Chapter 13 bankruptcy.

Even if the relationship doesn’t survive, a divorce proceeding can be a big advantage. Bankruptcy law allows couples to file jointly as long as they are still legally married, meaning the divorce isn’t final in Connecticut yet. Even if couples have already filed for divorce, they can still file jointly and both receive the benefit of either debt discharge or debt consolidation and repayment.

One of the most common problems if one spouse files, and not the other, is that many couples hold their property jointly. Their assets are held jointly, which isn’t the issue, but the fact that their debts are also jointly held can be an issue.

If one spouse files Chapter 7 or Chapter 13, and the other doesn’t, it’s hard to truly get a fresh start. The non-filing spouse will still be responsible for any debts that are in his/her name. In an intact family, that means a good portion of the family income is still going to be going out the door to creditors.

In a situation where the couple is divorced, or getting divorced, the Connecticut court’s decree can be critical. If the decree holds one spouse harmless from debts of the other, the filing spouse may find themselves in contempt of that order if they file Chapter 7 or Chapter 13. The problem is that you may obtain a discharge of the debt as to the Creditor, but if that same Creditor then seeks payment from the non-filing spouse, the non-filing spouse may be able to sue the spouse that filed bankruptcy for reimbursement. This can potentially leave the filing spouse with a discharge that isn’t as helpful as anticipated.

Our attorneys at Beckett Law, LLC will work closely with your divorce attorney so that we can achieve the best possible outcome for your action with an ex-spouse that must be factored in.