One thing that some spouses experience as a result of a divorce is bankruptcy. The relationship actually may have teetered on the brink over finances, as it’s reported that 22% of divorces are tied to disagreements over money matters.
It may even be couples at the higher end of the income spectrum who find themselves in the throes of both bankruptcy and divorce simultaneously the most. But these two legal processes should ideally be coordinated so that both spouses reap the most potential benefit.
You and your Tennessee divorce attorney will need to direct your legal actions in conjunction with the advice and counsel from your bankruptcy law attorney. It’s possible that your attorney will advise you to first handle the bankruptcy as a married unit, and then segue into your divorce.
There may be solid reasons for this. For one, it’s cheaper for a married couple to file jointly for bankruptcy, as you are looking at one set of filing and attorney fees instead of two. Then, too, filing as a couple may extend your exemptions and allow you to salvage more assets.
In some circumstances, it may be better to first divorce and then file for bankruptcy. This could be the case for higher-income couples seeking clean slates with Chapter 7 bankruptcy filings. They may earn too much money jointly to pass the Means Test for filing a Chapter 7 bankruptcy petition.
Those couples who are contemplating filing for both divorce and bankruptcy may need to work together during the bankruptcy process in order to reap the most benefits out of their property settlement in their divorce. These complex legal situations need to be carefully managed to avoid the loss of marital assets you will need to start your newly single lives.
