Future.

Divorce and financial hardship often go hand in hand. Many couples in Mississippi face the difficult decision of when to file for bankruptcy: before or after ending the marriage. The choice matters. Timing can affect what debts are erased, how property is divided, and whether either spouse is left holding the bag.

Benefits of Filing Bankruptcy Before Divorce

Filing a joint Chapter 7 bankruptcy before divorce can make the entire process smoother. It allows both spouses to eliminate joint debts like credit cards or personal loans in one filing. That leaves fewer issues to sort through during the divorce. In Mississippi, joint filers may also qualify for double exemptions, which protect more property from being liquidated.

In addition, filing together means sharing court and legal costs. However, both spouses must pass the Chapter 7 means test. If their combined income is too high, they may not qualify. In that case, waiting until they separate and have lower individual incomes may open the door to Chapter 7 later.

Why Some Wait Until After Divorce

In some cases, delaying bankruptcy makes more sense. One spouse may plan to file solo to protect specific assets or avoid sharing exemption limits. For example, if the divorce awards one spouse the house, they may file alone later to protect it from creditors.

Filing separately also helps when income limits are an issue. Once separated, each person is evaluated based on their own earnings, which may allow one or both to qualify for Chapter 7. However, this route means paying for two cases instead of one, and a person could miss out on certain protections.

Bankruptcy Does Not Erase Everything

Not all debts go away in bankruptcy. In Mississippi, support obligations like child support or alimony are not dischargeable. However, property settlement payments to an ex-spouse may be wiped out under Chapter 13. That is why it matters how debts are labeled in your divorce decree.

We Help Mississippi Clients Time Bankruptcy the Right Way

At O’Brien Law Firm, we work with clients to make smart decisions about bankruptcy and divorce timing. If you are unsure when to file or how it might affect your future, we are here to help. Contact us today to protect your finances and move forward with confidence.