Financial struggles faced by Maryland residents can cause a marriage to fail. When the couple decides to split and file for bankruptcy to start life anew, there are a few considerations before filing one or the other. Keep in mind individuals should assess their situations carefully before making a decision.
Mediate.com recognizes the difficulties in making either decision. Depending on the type of bankruptcy a person considers filing can have a huge impact on whether they file for bankruptcy or divorce first. A Chapter 7 bankruptcy only takes a few months while a Chapter 13 bankruptcy can take a few years to resolve.
When considering which type of bankruptcy to file, look at the assets, income, situation and marital debts. Couples with too much money in income and assets may not qualify them for Chapter 7. However, amicable situations may benefit from double exemptions when filing for bankruptcy. Marital debts decided and separated during bankruptcy can help with the division of assets during the divorce proceedings.
Divorce Magazine recommends looking at their personal situation carefully. A person looking at both personal and financial freedom should consider the status of their relationship. Merely because the relationship no longer works does not mean the relationship has deteriorated into an unsafe situation. However, an untenable relationship may take precedence over the financial reset of bankruptcy.
There are pitfalls to filing bankruptcy and divorce at the same time. During bankruptcy, all property and assets freeze which causes the family court to wait for the decision of the bankruptcy court before proceeding. Divorce is stressful enough for most people to not add the burden of a dragged out case due to bankruptcy court.
