What Effects Does Divorce Have On Bankruptcy?
Facing either divorce or bankruptcy is stressful enough. Discord in a marriage often involves money and debt-related issues. Divorce is often a cause of financial problems and can trigger the need to file a bankruptcy. If you are going through both at the same time, you need an experienced lawyer to guide you through it. There are important considerations for pre- and post-divorce issues.
At the Law Office of Bernard J. Natale, Ltd., I can help you understand the interaction of a divorce case and bankruptcy. If you and your spouse are facing divorce and bankruptcy, contact my Rockford office today for a free consultation to discuss how bankruptcy may impact your divorce.
Frequently Asked Questions Involving Divorce:
How can bankruptcy help me finalize my divorce?
A divorce involves dissolution of the marriage and a division of property. What people do not always realize is that a divorce also allocates and divides debt.
Often the simplest solution to debt allocation is for both parties to get a fresh start in bankruptcy, rather than spending more time and money arguing over how debt should be divided. Even if separated, parties can still file bankruptcy together so long as the divorce is not finalized, resulting in substantial savings in attorney’s fees and court costs.
My former spouse still owes me a debt from our divorce, but has filed bankruptcy. How does this affect me?
If your ex-spouse has an ongoing child support obligation to you or owes you for back child support, you will not be affected at all by his or her bankruptcy filing. Those debts are not dischargeable. If you are owed a debt as a result of property division, your rights may be affected, depending on what type of bankruptcy your former spouse has filed.
It is also important to remember that your divorce agreement is a contract. Your agreement to allocate a credit card debt or vehicle loan to one party in the divorce does not alter the finance agreement you signed with the finance company. If you were jointly liable on a car loan, unless you refinanced the debt, you could still be subject to collection efforts if they stop making payments, even if it is “their car” after the divorce. Bankruptcy can help eliminate these debts.
My former spouse is pursuing me for child support. Can bankruptcy help?
Your child support obligation will not be discharged no matter what chapter of bankruptcy you file. However, Chapter 7 bankruptcy could help you discharge other debts, making your child support obligation more manageable. Chapter 13 bankruptcy may allow you to consolidate your back child support obligations along with other bills into one manageable monthly payment.
Learn More Before You Start Divorce Or Bankruptcy
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.