It is common for couples filing for divorce in Pasadena to report that financial problems were a trigger in the decision to end their marriage. Financial trouble can be very stressful, which is why Pasadena divorce lawyers often have clients who come in asking if it's better to file for bankruptcy before they divorce or wait until the divorce is finalized to file.
First, if you are experiencing financial trouble, it's important that you understand bankruptcy does not erase all debts. Child support or alimony payment from past marriages is not dischargeable in bankruptcy. Student loans, most tax debt, and certain criminal fines and penalties are also not dischargeable.
Second, while bankruptcy can be a wonderful tool for getting back on your feet after a financial crisis, it does leave a large black mark on your credit report. It will be hard to get a loan or a credit card for quite some time after filing for bankruptcy. If you end up needing to move after your divorce, a recent bankruptcy filing will make it harder to rent an apartment and getting an new mortgage will be next to impossible. If you work in an industry where credit checks are done on prospective employees, bankruptcy might even make it harder to find new employment.
If you and your spouse are severely in debt and have determined that bankruptcy is your best option, it is often best to file for bankruptcy before filing for divorce. If you file for bankruptcy first, you will no longer have many assets or debts to divide and your divorce proceedings will be relatively straightforward. Also, you typically can't file for bankruptcy jointly after you are divorced, even if your debt is jointly held. This means that if your ex offers to repay a jointly held debt and later files for bankruptcy on his own, you'd still be responsible for the debt unless you filed for bankruptcy separately as well.
How Can We Help?
If you are thinking of filing for bankruptcy either before or after your divorce, please contact our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com. Our experienced Pasadena family law lawyers can help explain what steps you should take to make sure you're able to move on to the next stage of your life as soon as possible.