Can I File for Bankruptcy During a Divorce?

March 11, 2025

The divorce process brings its own emotional and financial challenges, but if you need to file for bankruptcy amid financial struggles, that decision can introduce an entirely different set of challenges. Shared debts, legal fees, and asset division can all complicate the already-complicated separation process. So, if you need to file for bankruptcy, you should know exactly what that entails. Let our Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton explain what you need to know.

How Does Bankruptcy Affect Divorce Proceedings?

Divorce proceedings involve questions about property division, spousal support, and shared income; bankruptcy can influence all of these questions, implement an automatic stay on most collection efforts, and even induce legal action. Bankruptcy can also temporarily pause divorce proceedings, especially when there is overwhelming debt. However, it’s important to note that bankruptcy does not affect certain family law matters, such as child support and alimony. You are still required to fulfill these obligations, regardless of your bankruptcy declaration.

While bankruptcy may delay some aspects of divorce, such as asset division, the family court can still move forward with decisions related to custody or visitation. You may want to consult with both a family law attorney and a bankruptcy lawyer to ensure that your filings align properly.

Should You File for Bankruptcy Before or After Divorce?

If you file for bankruptcy jointly before your divorce, you and your spouse can discharge your shared debts together, which could simplify the divorce process. This approach may be beneficial if you and your spouse can cooperate financially. However, if you anticipate conflict, you may want to file separately after the divorce is finalized. A post-divorce bankruptcy allows you to manage your debts independently without worrying about your spouse’s finances.

Consider timing carefully—filing for bankruptcy before divorce might give you a cleaner slate regarding joint debts, but filing after could allow you more control over your financial future.

What Types of Bankruptcy Can You File During a Divorce?

You have two primary options: Chapter 7 and Chapter 13.

• Chapter 7, also known as liquidation bankruptcy, allows you to discharge qualifying debts quickly, often within a few months. However, your income must meet specific eligibility requirements, and you may need to liquidate non-exempt assets to satisfy creditors. Certain assets, like retirement accounts or your primary residence, may be exempt from liquidation in some cases, but it’s important to understand your state’s specific exemptions.
• Chapter 13 bankruptcy, a reorganization plan, allows you to repay debts over several years while keeping assets intact. This option benefits those with steady incomes, as it enables you to manage your financial obligations without losing property. Under Chapter 13, you may be able to retain your marital property, although your payment plan must reflect your ability to repay creditors over time.

If you file for Chapter 7, the court may hold non-exempt assets to pay creditors, which can affect the property division arrangement in your divorce. Chapter 13, on the other hand, allows you to keep assets while reorganizing debts, which may be helpful in retaining marital property during the divorce.

Protect Your Financial Future with the Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton

Careful financial planning is crucial when making the right decisions during the emotionally, financially, and physically draining divorce process. Trust the seasoned Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton to guide you. Call us at 800-547-4LAW (4529) or contact us online for a free consultation.

We have offices in Baltimore and Owings Mills, allowing us to represent clients in Maryland, including those in Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Prince George’s County, Queen Anne’s County, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.