Divorce or Bankruptcy: Which Should Be Filed First?
Since the divorce process involves the division of assets, some people end up with more financial challenges than they could handle. Losing half of the household money that you used to enjoy after the divorce can mean huge adjustments in one’s finances. Did you know that many of those who file for bankruptcy in Canada cite their divorce as the primary reason for finding themselves in such financial difficulty? So which one should be filed first – divorce or bankruptcy?
Planning ahead can make both cases less complicated and more cost-effective. Deciding on whether to file for divorce or bankruptcy first should all depend on what you and your legal advisor decide on. Where you live, what you do for a living and how much you are earning are all factors that need to be closely considered before any legal action is taken. They can either make your plans work out for your or make you lose more than you can afford.
Divorce and Bankruptcy Costs
Bankruptcy filing fees are the same whether you decide to file it individually or joint with your spouse. If you are planning to file for bankruptcy and divorce, it is best to file for a joint bankruptcy before you file for divorce because it will be much cheaper. Also, if you decide to file for a joint bankruptcy, you pay less lawyer’s fees compared to if you filed it separately. However, you may want to discuss with the attorney the impending filing of the divorce as there may be a conflict of interest for the lawyer is representing both you and your spouse.
Filing for bankruptcy before the divorce may make things a lot simpler, not to mention more cost efficient. Not only will it simplify the process of property division, but it could help lower divorce costs too.
Property Division After Bankruptcy
Paying off all the debt during the filing of bankruptcy will simplify the whole process of dividing assets and liabilities during the divorce. However, the process may have an enormous impact on the properties that you and spouse may have to divide. Before you put yourself in the middle of the all the mess that may come with bankruptcy or divorce, make sure to find yourself a good lawyer who can well-represent you in both cases. Only a good lawyer will be able to help you understand the process and get you through it without losing everything you have.