Should we file bankruptcy or wait until after foreclosure? 10 Answers as of October 26, 2016

My wife and I separated and filing for divorce soon. I cannot afford mortgage and proceedings have started for foreclosure.

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OlsenDaines | Rex Daines
It typically does not matter which happens first - the foreclosure or bankruptcy. If you are filing a bankruptcy together, that must be done prior to the divorce being final, otherwise, you will need to file (and pay for) two separate bankruptcies.
Answer Applies to: Oregon
Replied: 10/26/2016
Keith M. Nathanson, PLLC
Keith M. Nathanson, PLLC | Keith Nathanson
This is difficult to answer without more details and a consultation as there is no one "right" answer.
Answer Applies to: Michigan
Replied: 10/20/2016
Ronald K. Nims LLC | Ronald K. Nims
You've got three legal matters going on: Divorce, foreclosure and bankruptcy. As a general rule, I'd recommend doing the divorce first, then the bankruptcy (which would probably take care of the foreclosure) and then the foreclosure (if it's still an issue). However, everyone's situation is unique so you should consult a lawyer who is familiar with both divorce and bankruptcy.
Answer Applies to: Ohio
Replied: 10/20/2016
Stephens Gourley & Bywater | David A. Stephens
That depends on whether you want to file jointly or separately and on whether you would need to file bankruptcy irrespective of the mortgage.
Answer Applies to: Nevada
Replied: 10/20/2016
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If you file together, before divorce finalized, you only have to pay for one bankruptcy. As for the foreclosure, it does not matter.
Answer Applies to: California
Replied: 10/20/2016
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    Filing BK right before the foreclosure sale will allow you to remain on the property longer. I would suggest that you meet with a lawyer. There are other pros and cons you need to discuss.
    Answer Applies to: Colorado
    Replied: 10/20/2016
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Well if you want to delay the foreclosure so you can live rent free, file bankruptcy now. If you want to stop future obligations for HOA dues and other house related expenses, file after the foreclosure. Either way, retain a bankruptcy attorney now because you may not be eligible for bankruptcy.
    Answer Applies to: Nevada
    Replied: 10/20/2016
    Garner Law Office
    Garner Law Office | Daniel Garner
    If you and your wife are on speaking terms, the least expensive route would be to file for bankruptcy jointly and surrender the house in the bankruptcy. Sometimes the bankruptcy trustee can facilitate a short sale which would be better for your credit score than a foreclosure. If there are serious divorce issues, however, it may be best to do the divorce first before filing for bankruptcy. You can still surrender the house to the lender or try to do a short sale to avoid foreclosure.
    Answer Applies to: Oregon
    Replied: 10/20/2016
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    First things first: you really should retain an experienced bankruptcy lawyer who is well acquainted with divorce. It's almost always worth the investment-and since you have two legal matters which can have some reciprocal effects, it's even more important. The benefit of waiting until the foreclosure is complete is that you can have a considerable period of rent-free living in the real estate. Depending on the form of the mortgage, you can have a redemption period of 6 months (the usual arrangement) or one year. So, assuming the mortgage-lender obtains a judgment today, you would still have at least six months to stay on in the home, and perhaps a month or so longer.
    Answer Applies to: Wisconsin
    Replied: 10/20/2016
    Paul Stuber, Attorney at Law
    Paul Stuber, Attorney at Law | Paul Stuber
    It is usually better to file while still married. You can file jointly and there is no question that you are both discharged from the debts at the time of the divorce. Then the Divorce does not have to divide the debts and assets that have gone away through the bankruptcy.
    Answer Applies to: Colorado
    Replied: 10/20/2016
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