Skip to content 
Divorce is challenging on its own—but when bankruptcy enters the picture, the legal and financial stakes rise significantly. In Texas, the intersection of bankruptcy and family law can create confusion, particularly around debt division, property rights, and support obligations. Decisions in one area often influence outcomes in the other, making timing and strategy critical. Whether you’re facing overwhelming debt, a pending divorce, or both, understanding how bankruptcy and family law interact can help you protect your assets, clarify your responsibilities, and make informed choices during a difficult time.
Can You File for Divorce and Bankruptcy at the Same Time?
Yes, but it comes with drawbacks. Filing for both at the same time slows down both processes. Bankruptcy creates an automatic stay, which puts a hold on property division during the divorce. That pause can stall the divorce case if the judge needs to determine who owns what.
Most couples file for bankruptcy first. That clears joint debts and simplifies the divorce process. Others wait until after the divorce to file individually. The best timing depends on what type of bankruptcy you’re filing, how much debt you share, and how cooperative both sides are.
Chapter 7 or Chapter 13?
Chapter 7 Bankruptcy
This chapter wipes out most unsecured debts, like credit cards and medical bills. It moves quickly, usually closing within three to six months. If you both qualify, this can eliminate shared debts before divorce.
However, Chapter 7 can involve selling off property to pay creditors. Texas does offer generous exemptions for homesteads, personal items, and vehicles. But if your assets exceed those limits, the court may liquidate the extra property.
Chapter 13 Bankruptcy
Chapter 13 sets up a repayment plan over three to five years. That plan might overlap with divorce proceedings. Courts usually recommend finalizing the divorce before filing Chapter 13. Otherwise, changes in income or household size may require a plan modification.
Some people choose Chapter 13 to save their home or keep property that Chapter 7 would liquidate. If you’re the higher-earning spouse, the court may expect you to pay into the plan based on your full income, even if you’re separated.
Who Pays the Debt?
Texas is a community property state. That means both spouses are responsible for debts acquired during the marriage, even if only one person’s name is on the account.
Separate vs. Community Debt
- Community debt includes loans, credit cards, and mortgages taken out while married. Both parties are liable.
- Separate debt usually refers to obligations one spouse had before marriage. That person alone is responsible unless the other agreed to it in writing.
During divorce, the court divides community property and debt fairly, but not always equally. If one spouse keeps the house, they may also keep the mortgage. If the other takes the car, they take the car loan too. However, even if the divorce decree assigns a debt to one person, the creditor can still pursue both parties if both names are on the account.
What Happens to Property?
Community Property and Bankruptcy
In bankruptcy, all community property enters the bankruptcy estate. That includes assets either of you gained while married. Filing jointly can protect those assets better under exemptions. Filing alone may expose community property to creditors unless it’s clearly exempt.
Exemptions in Texas
Texas allows people to choose between state and federal exemptions. Most filers choose the Texas exemption system because it’s more generous. You can protect:
- A primary home (regardless of value, as long as it’s not on more than 10 acres in a city or 100 acres in rural areas)
- Personal items, including furniture, clothing, and food
- One vehicle per licensed driver
- Retirement accounts and pensions
The non-filing spouse usually benefits from these exemptions too, but results vary case by case.
Will Bankruptcy Wipe Out Divorce Obligations?
No. Bankruptcy does not clear all divorce-related debt.
What You Cannot Discharge
- Child support: Bankruptcy does not affect ongoing child support or back payments.
- Spousal maintenance: Alimony orders remain intact after bankruptcy.
- Property division: If the divorce decree assigns a debt as part of property division, bankruptcy won’t erase it under Chapter 7. Chapter 13 may offer partial relief, but courts tread carefully.
If your ex files for bankruptcy and tries to escape property settlement payments, you may have to fight it in bankruptcy court.
Should You File Together or Separately?
Couples who can cooperate may benefit from filing jointly before divorce. That allows both parties to share the filing costs, clear debt quickly, and avoid future collection headaches. However, trust is key. If you suspect hidden income, concealed assets, or foul play, filing separately and divorcing first may be safer.
If only one person files, the non-filing spouse may still be affected. Creditors can still go after joint assets or accounts unless the debt gets discharged.
Conclusion
In the end, navigating the complexities of bankruptcy and family law requires careful planning, clear legal guidance, and a full understanding of how the two areas intersect. The choices you make during this time—whether related to debt discharge, property division, or support obligations—can have long-lasting consequences for your financial future and family stability. By addressing both issues together and not in isolation, you position yourself to make informed decisions that protect your rights and minimize unnecessary setbacks.
Legal Advice Matters
Bankruptcy law is complex, and divorce adds layers of difficulty. Each case looks different. An attorney can review your financial records, help you understand your options, and protect your rights. Filing the wrong type of bankruptcy or doing it at the wrong time can cost you property, time, and peace of mind.
Promoting Your Firm
If you’re dealing with divorce and bankruptcy in Texas, you don’t need to figure it out alone. Our firm works with individuals and couples facing serious debt and separation. We handle both family law and bankruptcy filings with efficiency and care. Our goal is to help you protect your property, avoid mistakes, and start fresh. Call us today for a consultation.
FAQs About Divorce and Bankruptcy in Texas
Can I file for bankruptcy while divorcing?
Yes, but it might delay the divorce or complicate property division. It’s often smarter to file bankruptcy before or after the divorce.
Does bankruptcy cancel child support?
No. Bankruptcy never cancels child support, current or past due.
What happens if my ex files for bankruptcy after divorce?
If your name is still on shared debts, creditors can pursue you. The divorce order does not protect you from creditors, only from your ex.
Will the court sell my property in bankruptcy?
It depends. In Texas, most people can keep their home, vehicle, and personal belongings if they meet exemption rules. If not, the court may sell non-exempt property.
Who should file for bankruptcy first?
If you’re still married, filing jointly can help wipe out joint debts. If you’re already separated or don’t trust your spouse, it may be better to file alone after divorce.
Other Articles you may be interested in:
- How a Bankruptcy Lawyer in Fort Worth Can Assist During Your Divorce
- Final Thoughts on Bankruptcy and a Transition Into Discussing the Sale of Your Home in a Divorce
- The Role of a Bankruptcy Attorney During Divorce Proceedings
- Is a Wife Responsible For Her Deceased Husband’s Credit Card Debt?
- What Happens To Debt in Texas Probate?
- What Happens to Your Debt When You Pass Away in Texas?
- Can I be held responsible for my spouse’s student loan debt if we divorce?
- Dividing Your Property and Debt in a Divorce
- Military Divorce and division of marital property and debt
- How are assets and debts divided in Divorce?
- How to untangle your debts during divorce
- How is credit card debt handled in a Texas divorce?
- Know How Property and Debts are Divided, When Preparing for Your Texas Divorce
- What Happens to Marital Debt During a Texas Divorce?
Frequently Asked Questions about Chapter 13 Bankruptcy
The percentage of debt that you pay back in Chapter 13 bankruptcy depends on various factors such as your income, expenses, and the amount of debt you have. Your bankruptcy repayment plan will be structured according to your ability to make payments over a specified period, typically three to five years.
Chapter 13 bankruptcy can have implications for a marriage when financial difficulties arise. It involves developing a repayment plan to manage debts over time. If both spouses are jointly responsible for the debts, they can file for Chapter 13 jointly and work together to address their financial challenges.
While Chapter 13 bankruptcy can provide a valuable opportunity to reorganize debts and regain financial stability, it also has potential downsides. One of the main drawbacks is the length of the repayment plan, which typically lasts three to five years. Furthermore, it mandates a regular monthly payment, and you may need to sell assets that are not exempt to contribute to repaying the debt.
When filing for Chapter 13 bankruptcy individually in a marriage, your spouse’s separate property remains unaffected. However, if you share responsibility for the debts or your spouse’s income contributes to the household, it factors into your repayment plan calculation. Consulting with a bankruptcy attorney is crucial to understand the specific implications for your spouse.
In Chapter 13 bankruptcy, the marital adjustment calculates the disposable income available for repaying debts. It considers the income and expenses of both spouses when they share household expenses. The adjustment helps ensure a fair distribution of the financial burden within the repayment plan.
If you find that your Chapter 13 payment is unmanageably high, it is crucial to address the issue promptly. You can consult with your bankruptcy attorney and request a modification of your repayment plan. The court may consider adjustments based on changes in your financial situation or unforeseen circumstances that make the original payment amount unaffordable.
