Bankruptcy Following Divorce

It can be difficult to navigate the complex legal system when filing for bankruptcy after a divorce. I want to cover some of the basics of what occurs in a bankruptcy following a divorce to help smooth out the stressful process.

On Joint Filing – Once the divorce is finalized, you and your ex-spouse can no longer file a joint bankruptcy petition. How your bankruptcy filing can affect your ex-spouse depends on which chapter of bankruptcy you choose to file.

On Dividing Belongings – When you go through a divorce you need to divide your debts and belongings between yourself and your ex-spouse. Laws vary between states so speak further with a bankruptcy attorney to find out what responsibilities you have for various debts and belongings.

On Filing Chapter 7 – If you or your ex-spouse file for Chapter 7 bankruptcy and debt that was held jointly during your marriage gets discharged, then creditors may be able to collect that debt from the non-filing spouse.

On Filing Chapter 13 – If you or your ex-spouse file for Chapter 13 bankruptcy, most debts are eventually repaid and the non-filing spouse is typically protected from having responsibility of any debt. Cosigners and co-debtors are more protected in Chapter 13 than in Chapter 7.

While bankruptcy discharges many debts, debts such as child support and alimony cannot be erased. Consulting a divorce attorney about adjusting the terms of your divorce could be a helpful option.