While divorce and bankruptcy are both considered chances for couples to move toward a fresh, exciting future, the two legal processes can overlap and ultimately harm each other. It is wise to research your options and learn more about the challenges you might face. Whichever path you choose to explore first, here are five tips you should remember.

  1. Don’t attempt to do both at the same time: This decision might simply boil down to simplicity, but you should decide which legal process to go through first and actively manage that process. Since the divorce process devotes a significant amount of time to dividing assets and debts, bankruptcy’s “automatic stay” might make it difficult for the family court to access your financial information. Overlapping your bankruptcy and divorce can ultimately lengthen both processes adding stress and confusion along the way.
  2. Examine your situation and decide which process you should follow first: Since you’ll want to avoid overlapping the two legal processes, you’ll need to carefully decide which one to follow first. Your unique situation will dictate whether you go through the bankruptcy or divorce first. For example, some jurisdictions will allow double exemptions for a married couple which could be a positive in bankruptcy if you own numerous assets. Conversely, your joint income might make filing a Chapter 7 bankruptcy impossible.
  3. Chapter 7 generally has a shorter timeline: Chapter 7, or “debt elimination” bankruptcy, typically has a duration of three to six months. Chapter 13, on the other hand, is often referred to as “debt repayment” and the plan generally lasts between three and five years. It is possible to restructure Chapter 13’s repayment after a divorce, but it can be a complex process.
  4. Some debts are excluded from bankruptcy: Based on your unique financial situation, it is wise to remember that not all debts can be discharged in bankruptcy. For example, student loans, spousal support and child support cannot be eliminated through bankruptcy.
  5. You might need a new attorney: If you have a lawyer representing you and your spouse through the bankruptcy, that attorney might face a conflict of interest in representing you both in a divorce.

While many people will rely on personal research and information from friends and family members, it is wise to discuss the situation with an experienced legal professional.