Joint Bankruptcy

• If you file for bankruptcy jointly before you file for divorce, both your debts and your spouse's debts are included in the bankruptcy petition. This means that all of the debt in your name only, in your spouse's name only and the debt that is in both of your names is included in the petition. Debts such as student loans and court ordered support are not dischargeable in bankruptcy. The court may include these debts when determining your disposable income. Whoever owns these types of debts will still have to pay them after the court discharges your joint bankruptcy.
  
  

Liability

• If you don't file for bankruptcy jointly before your divorce, you will each have to file separately. This works out fine if the both of you decide to file for bankruptcy individually. Should one decide not to file and the other one does, keep in mind that the bankruptcy only absolves the person filing from his or her debt liabilities. This means that if your ex-husband files for bankruptcy and you do not, the creditors can no longer pursue him for your joint debts, but they can continue to pursue you.
  
  

Benefits

• Filing for joint bankruptcy before your divorce means that you and your spouse will only have to pay one bankruptcy filing fee and one attorney. Should you wait until after your divorce to file, each of you will have to pay a filing fee and pay for your own attorneys. Filing for bankruptcy before the divorce can also help when negotiating the terms of your divorce regarding the marital assets and debts.
  
  

Considerations

• If you file for bankruptcy jointly before your divorce, once the court discharges the bankruptcy, the two of you will emerge from both your divorce and bankruptcy with less debt. If you incurred a substantial amount of debt during your marriage, this can make starting over financially much easier on both of you. If you are already divorced and you are thinking of filing for bankruptcy, speak to your ex-spouse about the joint debts left to both of you after the divorce. If your ex-spouse does not want or need to consider filing for bankruptcy, you can still file, but you will have to do so on your own.