What You Should Know About Bankruptcy and Divorce in PA

Written by Anthony Piccirilli

Money is often the top stress factor in many marriages. Sometimes, it is the reason couples pursue divorce. Regardless of whether or not money led to your divorce, you may find yourself in a position where it makes sense to file for bankruptcy. Since bankruptcy with divorce can add a great deal of complexity to your life, we’ve created this list of what you should know about bankruptcy and divorce in Pennsylvania.

If you are going through a divorce and considering bankruptcy, it is in your best interest to reach out to our highly skilled Pittsburgh divorce lawyers at Pittsburgh Divorce & Family Law, LLC. We can explain your legal options and help you protect your future and finances. Call us today at (412) 471-5100 or use our online contact form.

Most Important Things to Know About Bankruptcy and Divorce

Our Pittsburgh divorce lawyers encourage you to read these facts about bankruptcy and divorce. By doing so, you can avoid serious mistakes that can put you in a difficult financial position down the road.

Do Not File for Bankruptcy and Divorce Simultaneously

In order to keep things simple, it’s wise to file for bankruptcy before or after your divorce, not at the same time as your divorce. The major reason behind this is that once you file for chapter 7 or chapter 13 bankruptcy, a clause known as the automatic stay will be enforced. It prevents creditors from reaching out to you and freezes your assets and property.

In the event you file for bankruptcy and divorce right after, you may be left in a tricky situation because the automatic stay would keep the family court from receiving access to and dividing your assets. If this occurs, you may find yourself in a position where your divorce takes a long time to finalize and becomes increasingly stressful for you and your family.

Opt for Chapter 7 If You Hope for a Quick Divorce

If your goal is to finalize your divorce as quickly as possible so you can move on with your life, opt for chapter 7 bankruptcy, if possible. Since chapter 7 eliminates all debt that is considered dischargeable within a three to six month time period, you can file for divorce sooner if you opt for this type of bankruptcy.

It’s important to understand that if you choose chapter 13 bankruptcy, a three to five year payment plan will be set up and may significantly lengthen your divorce process. If possible, consult a bankruptcy lawyer to determine if you are a good candidate for chapter 7.

Bankruptcy Only Considers Some Debts

Contrary to popular belief, not all debts can be eliminated in chapter 7 bankruptcy. You will still be responsible for paying back nondischargeable debts if you file for chapter 7. Several examples of nondischargeable debts include child support, alimony, student loans, court fines, and attorney fees for cases related to child support.

Filing for Bankruptcy First is Often Advised

You are permitted to choose whether you file for bankruptcy or divorce first. Although every situation is different, it is often ideal to file for bankruptcy first. By doing so, you can split the attorney and filing fees with your soon to be ex spouse. You can also save yourself from having to pay joint debt. If you and your soon to be ex have an amicable relationship, filing for bankruptcy first is typically recommended.

Filing for Divorce First May Be Necessary in Some Cases

In some cases, it may make more sense for a couple to file for divorce before they file for bankruptcy. This is particularly true if you and your spouse hope to file for chapter 7 bankruptcy and your combined income disqualifies you from this type of bankruptcy. You may need to file for divorce initially so that you meet the chapter 7 requirements.

Contact Pittsburgh Divorce & Family Law, LLC

The divorce process is complicated enough on its own. Adding bankruptcy can make it even more stressful and confusing. Fortunately, our Pittsburgh divorce lawyers are here to help. Contact Pittsburgh Divorce & Family Law, LLC at (412) 471-5100 or use our online contact form to find out whether you should file for bankruptcy or divorce first. You can also count on us to connect you to an experienced bankruptcy lawyer.