How to File for Bankruptcy While Going Through a Divorce in Minnesota

Filing a joint petition for bankruptcy saves you court, administrative and lawyers' fees.

Filing for bankruptcy in Minnesota and getting a divorce are mutually exclusive events, but both require communication with your spouse. Even though you plan on separating from your spouse, your decision to file for bankruptcy will affect her long after your separation. At issue is whether you and your spouse share joint debts that you plan on including in your petition for bankruptcy. For example, if your spouse is a joint account holder on a credit card, she is liable for the debt if she fails to file a petition for bankruptcy.

Instructions

1. Consult with your spouse regarding the state of the household's finances and your decision to file for bankruptcy. Explain to her the ramification of failing to file for bankruptcy if she is named as a co-borrower on loans and lease agreements. Your spouse has the option to file for bankruptcy separately; however, the courts encourage couples to file jointly to save on court and administrative fees. Consider using an attorney to navigate through the bankruptcy process. Filing for bankruptcy as a couple saves money. The attorney will treat your filing and your wife's as one petition.

2. Compile a list of debts to include in the bankruptcy petition. Make sure your spouse agrees on the debts to be included. You should also provide copies if divorce attorneys are involved.

3. Organize financial documents to be submitted to the U.S. Bankruptcy Court for the District of Minnesota. You will be asked to provide financial records, a list of income and expenditures, a compilation of debt obligations, a statement of financial situation and tax filings.

Tips & Warnings

• If you file a joint petition for bankruptcy, you and your spouse will be required to receive credit counseling together and show proof to the court. Once you file a petition for bankruptcy, you are given an automatic stay of protection from your creditors. However, you still have to pass a means test to qualify for bankruptcy.

• If your household income is greater than the median of a similar-sized household in Minnesota, you may not qualify for Chapter 7 bankruptcy and may have to file Chapter 13, which stipulates a reorganization of debt with your creditors.

• Because you are filing for bankruptcy and divorce, you may be dealing with multiple attorneys. Communication with your spouse and her attorney is essential.

References

• United States Courts: Bankruptcy Process
• United States Courts: Chapter 7 Bankruptcy
• Bankruptcy Law Network: "Joint" Bankruptcy Filings --- Special Considerations for Married Couples

Resources

• The Bankruptcy Site: Filing Bankruptcy in Minnesota