Jump To Navigation

Should You File Bankruptcy Before Or After Divorce?

Posted on April 16th, 2014

Arizona residents who are contemplating filing for bankruptcy might be wondering whether they should do so before they file for divorce or not. This is a valid concern, especially for individuals whose names are on the mortgages for the residences they share with their spouses. According to an expert, it is wise for individuals to resolve as many issues as they can before they file for their divorces.

The first thing that people wanting to file bankruptcy and divorce should do is determine whether or not they live in an anti-deficiency state. An anti-deficiency state does not hold individuals liable for mortgages on properties they purchased as their primary residences. The deficiency on a mortgage is what is still owed on it after the property sells at a foreclosure option. Some states hold individuals liable for the deficiency on their foreclosed properties whereas other ones don’t. People who live in states where they will be liable for the deficiencies might want to consider filing Chapter 7 bankruptcy.

Chapter 7 bankruptcy will not only discharge people of the deficiencies on their mortgages, but it also discharges them of other debts like credit card debts and personal loans. After people who are eligible for Chapter 7 bankruptcy file it, then they should file for divorce. However, they should take care to make sure that they don’t reassume some of the debt that they have wiped off with their bankruptcy in their divorce settlements. For example, bankruptcy can relieve an individual of a certain debt, yet if he or she agrees to pay that debt as a stipulation of his or her divorce settlement, then he or she is liable for the debt again.

Bankruptcy Attorneys might be able to assist people in gathering all the documents needed to file their bankruptcy claims. They might also be able to help them ensure that they file their bankruptcy correctly.

Source: Fox Business, “Which should I file for first: Divorce or Bankruptcy?“, Justin Harelik, July 10, 2013

Contact Us for a Free Consultation
Office Locations

Phoenix Office One
Wright Law Offices
2999 N. 44th St., Ste 600
Phoenix AZ 85018

Telephone: 480-845-0145 / 866-703-3287
Phoenix Law Office

Phoenix Office Two
Wright Law Offices
668 N. 44th St., Ste 320
Phoenix AZ 85008

Telephone: 480-845-0145 / 866-703-3287
Phoenix Law Office

Scottsdale Office
Wright Law Offices
7135 East Camelback Road, Ste 230
Scottsdale AZ 85251

Telephone: 480-845-0145 / 866-703-3287
Scottsdale Law Office

Tempe Office
Wright Law Offices
2238 S. McClintock Dr.
Tempe AZ 85258

Telephone: 480-845-0145 / 866-703-3287
Tempe Law Office

Avondale Office
Wright Law Offices
12725 W Indian School Rd, Suite E-101
Avondale AZ 85392

Telephone: 623-258-4480 / 866-703-3287
Avondale Law Office

Mesa Office
Wright Law Offices

4856 E. Baseline Rd.
Suite #104
Mesa, AZ 85206
Telephone: 480-845-0145 / 866-703-3287
Mesa Law Office

Glendale Office
Wright Law Offices
20325 N. 51st Ave., Suite 134
Glendale, AZ 85308
Telephone: 623-258-4480 / 866-703-3287
Glendale Law OFfice

Facebook IconTwitter IconVisit Us On Google+Visit Us On Google+