This article is the third in a four part series focusing on marriage and bankruptcy. Today we will tackle the difficult issue of bankruptcy and divorce. Disagreements over money and personal finances is one of the leading causes of divorce. Filing bankruptcy can have a major impact on divorce proceedings because ‘community property’ or property owned jointly by both spouses will become part of the bankruptcy estate. When a debtor files a bankruptcy case, married or not, their property is subject to examination by the Bankruptcy Court and the Bankruptcy Trustee. The concern is always full disclosure of assets to ensure that there is no property available to liquidate in satisfaction of creditor’s claims. It is important to remember that in the many bankruptcy cases, debtor’s are able to retain most if not all of their property. The fact that the married couple’s assets will become part of the bankruptcy estate can complicate property settlement negotiations during a divorce especially if there are non-exempt assets to be liquidated. However, a bankruptcy filing can make some divorce proceedings easier to resolve by wiping the slate clean of debt that would have been allocated between the parties after the seperation. Remember, both spouses are responsible for the debts incurred during the time of their marriage. Without a bankruptcy both spouses will remain liable for the debts they incurred during their marriage and one spouse’s failure to pay will land squarely on the others shoulders. This is an unfortunate situation that I encounter all the time: a married couple gets a divorce (often due to financial strain) and one ex-spouse simply stops paying their debts, leaving the other holding the bag. If one ex-spouse files for bankruptcy and the other does not, the non-filing spouse will continue to be legally obligated to pay all of the marital debts. For this reason it often makes sense for a married couple to file a joint bankruptcy case before getting a divorce, so that both spouses can move on with their lives.