Many sources say that money is one of the primary factors in numerous divorces across the nation — this most likely includes many couples here in New Jersey. If you and your spouse are having money problems that are leading to divorce, it may be beneficial to slow down and consider what to do about your marital finances before going your separate ways. Depending on your circumstances, it may be more advantageous for you and your spouse to file for bankruptcy before filing for divorce.
If your spouse files for bankruptcy either during or after the divorce, you could end up being held responsible for all of the marital debts, including those that your partner agreed to pay during the divorce proceedings. If your name is still on the debts, creditors are under no obligation to honor your divorce settlement. They may come to you for payment of the debts that your ex-spouse has discharged during bankruptcy.
Filing for bankruptcy prior to ending the marriage has some significant advantages. First, you can file together, which provides some advantages in certain situations. Second, debts will be one less issue to deal with during the divorce. After you and your spouse part ways, your expenses may increase since you are living on your own. Starting your new life without at least some of the marital debt could relieve some stress as you start over again.
Bankruptcy can be an invaluable tool for New Jersey couples who are overwhelmed financially. However, for couples who are contemplating divorce, it can be used to clear the slate for both parties, which could give each of you the best start possible after the divorce. It makes good sense to have an attorney who can review your situation and advise you of the best course of action, including when it would be most beneficial to file for bankruptcy under the circumstances.