Filing Together

• If both spouses plan to file for bankruptcy, they can file jointly before finalizing the divorce. Filing jointly will cost less than filing separately, and it can eliminate or divide debt. A joint bankruptcy results in the inclusion of all community property and assets acquired during marriage, which, depending the type of bankruptcy, the court may distribute to pay creditors.
  
  

Filing Alone

• When one spouse files for bankruptcy prior to a divorce, the filing spouse is no longer responsible for the debt after the discharge. Once the filing spouse receives a discharge, the family court will not assign joint debt to the filing spouse. Creditors may seek repayment from the nonfiling spouse, if he or she is personally liable.
  
  

Property Settlement Agreements

• Under the bankruptcy code, nonsupport obligations that arise from a divorce will remain after a Chapter 7 bankruptcy discharge. However, in Chapter 13, the filing spouse can have these obligations discharged.