• The Mitten Law Firm, Plc

Get Divorced or File Bankruptcy?

You may want to do one before the other. But the choice isn't always obvious.


Many Michigan divorces are precipitated by arguments over finances. It is not uncommon to see bankruptcy and divorce happening in short order. Having two of the most stressful events anyone can go through happening almost simultaneously can be especially taxing. In order to make this road less bumpy, you may want to think about a few things:


Is your problem debt a problem for both parties in the divorce?

If you or your spouse came into your marriage with a significant amount of debt, or you have taken the majority of new debt out under only one of your names, the other party (your spouse) may not be entitled to much, if any, debt relief by the filing of a bankruptcy.

If the majority of the debt was incurred jointly, then it may be wise to be rid of as much as possible prior to the divorce, to make asset division less complicated.


The emotional toll!

As mentioned above, bankruptcy and divorce are monumentally stressful. The stress of dealing with harassing, aggressive creditors might make discharging your debt a priority. In fact, often, the removal of this burden can lead to reconciliation within the marriage.

However, there are cases where the spouse is acting worse than creditors! In these cases, it may be more beneficial to handle your bankruptcy as a single individual.


Post-divorce income.

A married couple with two incomes and significant assets might look like they can pay a large amount to creditors during bankruptcy. They may not even qualify for certain provisions in the bankruptcy code.

However, those same two people with one income each and divided assets could be subject to lower payments or receive more forgiveness.


What is your budget?

Neither bankruptcy, nor divorce, are free. You’ll want to assess the amount each case might cost you prior to attempting to file.

It may be beneficial to file bankruptcy as a couple, thus not creating two separate filings, resulting in two legal bills. Most Michigan bankruptcy clients are on tight budgets, so this may end up being the best option.


Not sure what to do or where to turn? Contact The Mitten Law Firm today to have us assist you in exploring your options for your Michigan divorce, chapter 7 bankruptcy, or both.

(734) 765-9382