Is it better to file bankruptcy before divorce or vise versa?

When one or both spouses file for bankruptcy, all assets and property that were acquired or bought during their marriage becomes part of the bankruptcy estate.  An automatic stay is given when filing for protection under the U.S. bankruptcy laws.  This stay prevents creditors from collecting on most debts.  However, it does not prevent you from asking a divorce court to order your spouse to pay child support and/or alimony.

Filing for bankruptcy prior to divorce may make it easier to negotiate the remaining debts and decide how they will be divided.  Negotiating a property settlement in the middle of bankruptcy can be complicated.  Debts related to a property settlement are presumed to be non-dischargeable in bankruptcy, and you will still be responsible for them. 

If you divorce prior to bankruptcy, that divorce settlement is between you and your ex-spouse and it doesn’t apply to the creditors.  If your ex-spouse does not pay his or her share of the debts, the creditors can come after you for payment.  These matters can be very complex and it is best to get legal advice from a family law attorney before making any decisions.

Talk to an Attorney before making any decisions regarding divorce and bankruptcy. The laws for both issues are complicated, and you'll need qualified legal advice.