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When bankruptcy and divorce collide

On Behalf of | Jan 15, 2024 | Bankruptcy

Many marriages fall apart over money, and struggling to make ends meet is a stressor that no marriage needs. Unfortunately, Ohio couples can find themselves facing divorce and bankruptcy simultaneously.

But it’s not the end of the world. Despite how bleak you may think your reality is, your future can still be bright. Following are some steps people in those circumstances can take to hopefully have a lighter landing.

Realize there’s a strategy involved here

Depending on your financial circumstances and any potential tax consequences, you could want very much to file one proceeding before the other. However, bankruptcy courts are routinely suspended pending the outcome of family law court cases that determine how the assets and liabilities are divided.

File bankruptcy jointly

Doing this saves on your legal and filing fees. But this option won’t work with couples who can’t be civil with one another. It requires spouses to work together and eliminate more joint marital debt than they would ever eliminate by filing singly. But for those couples who can manage to set aside their differences to work for the common good, this is the way to go.

Filing for divorce before bankruptcy

In some cases where one spouse earns much more than the other spouse, there can be advantages to filing for divorce first. Also, no two situations are alike.

Learn more about how the Ohio bankruptcy and family law courts intersect and how they affect your situation. That’s the best way to walk away from bankruptcy and divorce with what you need to move forward.