Divorce and Bankruptcy: Should We File Together?

05 Jan Divorce and Bankruptcy: Should We File Together?

One of the most common reasons given for having to file bankruptcy is because of a divorce. Although I was never convinced that two could live as cheaply as one, there’s no doubt that setting up a separate household is an expensive venture. Losing one of two household incomes also often results in mortgage problems, difficulties in paying the bills and economic hardship.

Once the divorce is final, you cannot file bankruptcy together. Usually, however, there is a period after the separation but before entry of the legal order of dissolution of marriage during which you can file one petition in bankruptcy for both of you. But, should you?

There are lots of reasons to file together: chief among them is the expense of two petitions as opposed to one. Many attorneys charge more for a joint petition in bankruptcy than for a single person, but usually it’s only a little bit more – a couple of hundred dollars rather than the fifteen hundred plus it costs to file one petition.

There are also reasons not to file together. It might be better to wait until after the divorce is final, since in some states more of your property will be exempt that way. Or, it might be better to file a chapter 13 for one of you now and a chapter 7 for the other later. Your circumstances will dictate how best to proceed. It’s always best to get help from a competent bankruptcy attorney.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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