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People may file for bankruptcy just before, during, or right after they file for a divorce. While it might affect what debts may or may not get discharged, a looming, pending or freshly finalized divorce case will not usually disqualify someone from filing for bankruptcy.
If the couple already qualifies for Chapter 7, they may want to file for Chapter 7 before getting a divorce because the process usually lasts only three or four months. If they are planning to file under Chapter 13, they may want to get a divorce before going through the bankruptcy.
Bankruptcy During a Divorce in California As a general rule, it's best to keep divorce and bankruptcy proceedings separate, rather than filing for them at the same time. The crossover of assets between the two cases can drag out both proceedings, costing you more time, money, and stress.
It is generally not a good idea to file both at the same time. Whether you file for bankruptcy before or after your divorce will depend on your financial circumstances and whether you and your spouse will be able to work together through the bankruptcy process.
The bankruptcy will wipe out (discharge) the qualifying debt of both spouses, thereby reducing the issues to be decided in divorce court, and. it costs less to file bankruptcy together as opposed to apart.