Many married couples who file for bankruptcy together unfortunately find themselves filing for divorce before their Chapter 7 bankruptcy has been discharged. So what happens when a couple wants to part ways but their Chapter 7 bankruptcy is still under review? Well, actually a joint bankruptcy, which can only be filed by spouses is two bankruptcy filings merged into one. So, if the married couple chooses, they can separate their cases. In order to separate the joint filing a motion to "deconsolidate" the bankruptcy will need to be filed with the bankruptcy court. After the bankruptcy cases have been separated each debtor can make an independent decision about the course of their case.  

Warning: Deconsolidating a bankruptcy case may not be in the best interest of either party. Consult with a bankruptcy attorney before separating a joint bankruptcy.

An article in the Seattle Times talks about how Sue Ferguson a public health worker survived financial crisis by filing bankruptcy after her divorce. The article talks about how filing for bankruptcy after her divorce freed her from credit card debt and medical bills; but I wonder how her ex-husband is doing now that she’s filed bankruptcy.

A lot of couples get divorced because of money issues. Oftentimes, before a couple decides to divorce they are up to their eyeballs in debt and unpaid bills. When getting divorced, debts will be divided between the couple in a divorce settlement; but that agreement is not binding to creditors. Creditors can decide who they will go after for payment of the debt. What this means is that if you ex-spouse does not pay his/her debt or files for bankruptcy they can still come after you. This is why if your marital financial house is not in order it’s probably best to file for bankruptcy before you divorce.

In the case of Ms. Ferguson, she benefited from filing bankruptcy after her divorce; but will you?