One of the benefits of getting your bankruptcy out of the way prior to a divorce is getting the property settlement taken care of. Negotiating a property settlement is complicated enough, if it has to be done in the middle of a bankruptcy it gets even more complicated.  

Generally speaking, debts related to a property settlement are presumed to be non-dischargeable in bankruptcy, meaning that the person who files bankruptcy can’t have those debts wiped out and must still be responsible for them. However the bankruptcy court can wipe out these debts if the person filing for bankruptcy can show that he or she cannot pay the debt and this will create a hardship for him/her or dependents.

 A good rule of thumb is that if you think your spouse is contemplating bankruptcy after your divorce is final, you may want to word your property settlement in such a way that your exs obligation looks and acts as much as possible like a support obligation instead of a property settlement. This is because support obligations are much more difficult to have discharged, and often survive a bankruptcy proceeding.