Money can be a common source of stress in a Texas marriage, and in many cases, disputes over finances can be contributing factors to a divorce. In some cases, the situation may be serious enough that bankruptcy is a consideration. If divorce is looming, the timing of a bankruptcy filing may depend on the financial situation of each party as well as the nature of the debts in question.
The debt and income of each party may determine whether bankruptcy is even possible. For example, one partner may have a high level of debt, but the other may have significant non-marital assets. Filing bankruptcy together might not be possible because the assets in question would prevent the discharge of the debts. In such a situation, it might be necessary to wait until after a divorce to initiate bankruptcy proceedings. This would also be the case if one of the parties has a high income that would interfere with the eligibility to file for bankruptcy.
If both parties share in the debt as well as in marital assets, it may be better to initiate bankruptcy action prior to filing for divorce. However, the property of the debtors becomes property of the bankruptcy estate if this action precedes divorce. This can interfere with the division of property, which could result in a delay of divorce action. A couple may need to determine which priority is higher before moving forward with either action.
Because both divorce and bankruptcy have significant long-term implications, it may be important for a spouse to find a family law attorney who can work well with a bankruptcy lawyer to ensure that both matters are clearly understood and addressed. Working with professionals in both areas, the spouse may be able to identify the steps needed to prepare effectively for both actions.