A divorce can be a challenging experience in your life. It can be even more stressful if you are going through bankruptcy at the same time.

Whether you should file for bankruptcy before or after your divorce will depend on the situation. You could go through both at once, but some jurisdictions will focus on one point over another.

When To File For Bankruptcy Before a Divorce

• You can file for bankruptcy first if you have substantial marital debts. A bankruptcy can cancel out some of these debts that would be divided during the divorce proceedings.
• Filing first is also best if you have various properties that might be divided between you and your partner. By liquidating some of these assets, the divorce process will be easier to manage and less expensive.
• You can also file before the divorce if you have concerns about legal fees. Filing a joint bankruptcy will be more affordable than if each person filed separately.

When To File For Bankruptcy After a Divorce

• You can file for divorce first if you could qualify for a Chapter 7 declaration after the divorce. You will qualify for Chapter 7 if your income is below the median in your state. It is easier to get here if you don’t earn as much money as your partner.
• You may also have an easier time paying off a Chapter 13 declaration after a divorce, as the amount you would spend each month in the repayment process will be minimal. This point works if you earn a consistent income and have enough money on hand to handle some of these expenses.

Check the total values of your debts and assets before deciding when to file for bankruptcy. Look at the types of debts you have and your income to see what can work the best.

When a divorce happens, the spouses often have a divorce agreement, a marital settlement, or any contract of the sort. These types of arrangements mean financial responsibilities for the parties involved. That’s why it is a common sight to see bankruptcy happen not long after a divorce.

However, because bankruptcy means being excused of many of your debts, does this mean that you are also relieved of your divorce settlement? The answer is YES.

Any financial settlement enforced by the court can be jeopardized by bankruptcy. Divorce is no different. You can discharge your separation agreements by filing for a Bankruptcy Chapter. There are two of them, Chapter 7 and Chapter 13.

Choose Chapter 13

Here’s why.

Without a unique argument, which is mostly very challenging to have, Chapter 7 will not pardon you of any dissolution-related debts.

On the other hand, Chapter 13 bankruptcy, also referred to as a wage earner’s plan doesn’t ask for that. And, it covers various types of debts.

Responsibilities That Will Remain

Even with all its perks, Chapter 13 doesn’t free you from all of your obligations. Here two of the most common responsibilities you can’t escape from.

Child Support

Most of your fiscal responsibilities as a former spouse may go away, but your accountability as a parent stays. Child support is a priority debt that can’t be diminished.

Alimony

Alimony, the financial support that the court orders a person to provide for their spouse after a divorce will also remain. Any debt in the nature of support, maintenance, or alimony is excepted from discharge.

Bankruptcy Validity

Just like all cases, the court needs to make sure your bankruptcy is valid before they approve of it. Do not abuse the function of Chapter 13 bankruptcy. Because if you do, the court will cancel your case. This will consequently allow your former spouse to make his or her claims.

Being bankrupt is such a mess and a hassle for an ordinary person like you. Bankruptcy is caused by the non-payment of debts of an individual or entity to their lenders or official receivers. The debtors filed a relief in some or most of their unpaid or unsettled debt.

You are also wondering if how long does bankruptcy stays on your credit report. You are worried that if you don’t pay your debts on time, you will not lend again or apply for mortgages and other related matters. Sometimes, your new employer or new landlord will ask for your credit profile to know if you can pay. In the United Kingdom, your bankruptcy records will show up to 6 years. Although, for usual circumstances, your history will stay in your profile for 12 months after you have correctly settled your unpaid dues. Your lenders will take you to court if you are unable to determine your debt, and they will require you to pay it, therefore, prolonging your bankruptcy record in your credit profile

How long does bankruptcy stay on your credit report.

After 12 months of bankruptcy

In the United Kingdom, particularly in England, Wales, and Northern Ireland, your lender will let you pay for 12 months to settle your dues. During these months, you are restricted from borrowing and give ample time to pay. After paying for 12 months, your lender will discharge you from bankruptcy, and therefore, your record is removed from your profile. Although, you take note that you should be honest about your previous financial history as some companies require you to disclose your current financial situations.

After 15 months of bankruptcy

If you are dishonest with your financial statements, your lender or official receiver will take you to court to have you included in the Individual Insolvency Register (IIR). IIR is the list of bankruptcy restrictions and debt relief register in the UK, which will let you pay your dues after 15 months from your date of bankruptcy.

After 27 months of bankruptcy

If you cannot pay your dues after 27 months of bankruptcy, your lender will put more restrictions on you. They will put up your property for sale, and worse, they will decide more on what to do with your property every after nine months should you continue to break their rules on payment.

After six years of bankruptcy

Dishonesty and breaking your lender’s rules will not do you good. After six years of non-settlement of your dues, your lender will apply for Bankruptcy Registration Undertaking (BRU). BRU is an order where the lender will further give restrictions to you for two to 15 years, depending on the severity of your disobedience to your lender.

Your bankruptcy records will stay in your credit report for 12 months up to 6 years, depending on the severity of your actions to your lenders or official receivers. You should settle your debts with your lender within 12 months of your bankruptcy so you will be discharged after. Therefore, less hassle and worry for you should you decide to borrow money again.