No one ever expects to face divorce and bankruptcy at the same time in Michigan, but it happens more often than you might think. When these two life-changing events collide, it can be challenging to know what to do. Therefore, let’s look at the steps you need to take when your divorce and bankruptcy intersect.
What comes first?
In most cases, it makes sense to file for bankruptcy first. This is because your debts may be discharged in bankruptcy, making it easier to get through your divorce. If you file for divorce first, you may still be responsible for your joint debts – even if the divorce decree says that your ex-spouse is responsible. This can strain your finances and make it difficult to rebuild your credit after bankruptcy.
There are some exceptions, however. For example, it may make more sense to file for divorce first if you have a lot of equity in your home and desire to keep it after your split. This is because you may be able to protect your equity in the property through a divorce settlement or by using state laws that allow one spouse to keep the family home after a divorce.
Tips for dealing with divorce and bankruptcy
No matter which route you choose, there are some things you can do to make the process easier. Here are a few tips:
- Communicate with your ex-spouse as you may need their cooperation to get through the bankruptcy process successfully.
- Create a budget that will help you keep track of your expenses and ensure you are not overspending.
- Look at how divorce and personal bankruptcy may affect each other and try to make the best out of your situation.
- It is essential to be patient and understand that things may not happen as quickly as you want them to.
Dealing with a divorce and bankruptcy at the same time is not easy. But, as with many people, you can always manage.