Some couples in Michigan need the financial freedom provided by bankruptcy. You may also no longer want to stay married.

While you can file for both at the same time, it may not be in your best interest to do so.

Choosing divorce first

Experian recommends couples choose to file either bankruptcy before the divorce or vice versa. The main reason is that the courts may decide for you which to file first if you file both at the same time. When you choose, you can determine which one is the most beneficial for your circumstances.

Filing for divorce first allows you to remove yourself from a negative marital relationship before tackling your debt. The divorce proceedings divide marital assets that can make filing for bankruptcy easier on you.

In some cases, you may qualify for Chapter 7 after divorce but not pass the means test while married. The court discharges qualifying debts under Chapter 7 whereas Chapter 13 uses a restructuring plan that may tie you to your spouse for a few more years until the bankruptcy completes.

Filing bankruptcy first

On the other hand, filing for bankruptcy first works if you have an amicable relationship. You must work with your spouse to file for bankruptcy.

The process of going through bankruptcy can help when you file for divorce by streamlining the financial portions of the process. Couples can also take advantage of additional benefits such as joint marital debt cancellation.

Both bankruptcy and divorce tend to be fraught with emotion and stress. Your marital situation may dictate which case you file first.