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Should I File For Bankruptcy During My Texas Divorce? 

Posted on in Divorce

austin divorce lawyerConflict around finances is one of the most common reasons couples in Texas get divorced. Whether financial troubles are due to irresponsible spending or an unpredictable downturn in a family business, the added stress of financial woes makes divorce even more difficult. 

Couples who are getting divorced may wonder if filing for bankruptcy would be beneficial. Each couple’s situation is unique, so it is important to understand how bankruptcy during divorce works and what your options are. This blog is a brief overview of how bankruptcy and divorce can influence each other. If you have questions about your divorce and financial situation, a qualified Texas divorce attorney is your best source for information. 

Should We File For Bankruptcy Before or After Filing For Divorce? 

Bankruptcy proceedings attempt to help couples or individuals reorganize their debt in a manageable way, but the bankruptcy process itself is not free. If couples wait until after they are divorced, they will have to pay the filing fees, credit counseling fees, and attorney’s fees twice - once for each spouse. If couples are still married, they can file a joint bankruptcy case. 

Additionally, filing for bankruptcy before divorce allows spouses to demonstrate a large household size to income ratio, making it more likely that they will meet bankruptcy’s income qualifications. Spouses who file for bankruptcy may be able to get rid of marital debt that would need to be divided during a divorce, potentially simplifying the divorce and speeding up proceedings. 

If a couple has already filed a divorce petition, it may be best to wait for bankruptcy until after the divorce is finalized. Bankruptcy can substantially complicate divorce proceedings, and handling the two processes simultaneously can be unnecessarily burdensome. 

Do I Still Have to Pay Child Support if We Get Divorced? 

Filing for bankruptcy before, during, or after divorce will not change an individual’s obligations to pay child support or alimony. Even during bankruptcy proceedings, when attempts by collectors are immediately halted, domestic support payments must still be made. Chapter 13 bankruptcy allows parents whose child support payments are in arrears to prioritize catching up on those payments before paying for certain other debts, such as taxes. In this way, filing for bankruptcy may allow someone to avoid jail time while they catch up on delinquent payments. 

Contact a Travis County Divorce Attorney

Understanding the potential impact of divorce in all areas of your life is essential for making wise decisions about your future. At Powers and Kerr, PLLC, our experienced Austin, TX divorce attorneys strive to make the divorce process straightforward and comprehensive so you can set yourself up for success. Contact our office at 512-610-6199 and schedule your confidential consultation today. 




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