Financial crisis often hurts intimate relationships. Separation typically follows most economic problems in a marriage. According to recent statistics, over 50% of bankruptcy filings have a connection to a divorce.
When couples face debt and divorce, the decision on what to file for first has a significant impact. The best course of action, in this case, is to look for a Salt Lake City bankruptcy attorney such as Utah Bankruptcy Professionals and ask for guidance.
Here are the benefits of filing for bankruptcy before a divorce.
It Saves You Money
You can file for bankruptcy jointly if you are still married. This means you will need one set of documents, one filing fee, and often only one attorney. Some law firms charge an additional fee for joint bankruptcy cases, but it is not as high as the fee for an individual application.
It Saves You from the Liability of Joint Debt
Both spouses are held responsible for all debts incurred in marriage. A creditor can collect the debt from any of you after a divorce settlement. Filing for bankruptcy during marriage frees you from paying the debts incurred during your marriage.
A lot of time is used up debating each spouse’s responsibility for marital debts. With the obligations out of your way, the divorce proceedings are faster and less contentious.
It Doubles Your Exemption Amounts
When filing for bankruptcy, the law allows you to hold on to some property to help you start afresh. The exempted value is limited to a specific dollar amount. In joint bankruptcy cases, each spouse can apply an exemption amount individually. This in effect doubles the amount exempted for each property.
Filing for bankruptcy before a divorce is the best way to start afresh financially. A bankruptcy application is, however, tricky and affected by the specific financial situation you are facing. It is advisable to hire an experienced bankruptcy lawyer to review your case and advice you on the appropriate course of action.