Finances is the leading cause of marital stress in most relationships, often times leading to divorce. Each spouse usually blames the other for the money problems; this may or may not be true. There is one undeniable fact however, you can divorce your spouse but you can’t divorce your debt.
If while married your spouse declares bankruptcy, it’s likely your attorney will advise you to follow suit. If your spouse gets relief from joint debt, the creditors will come after you to collect the full amount. If you happen to be in the middle of a divorce and your soon to be ex files bankruptcy, your divorce proceedings will come to an abrupt stop until the bankruptcy is complete. Keep in mind that as far as joint debt goes, even if your divorce decree binds one or the other spouse to particular debt, it does not however bind your creditors and they will go after whoever is on the account, divorced or not, and that will be you.
For many people who face grave financial difficulties while married, and planning a divorce, bankruptcy is almost inevitable. The question arises for couples in this situation, whether to file bankruptcy or divorce first. The answer greatly depends on things such as where you live and what problems need to be resolved. Experts do suggest that if the couple has more debt than assets, it is better to get the bankruptcy over with first. Attorney fees are also a consideration when deciding what to do first. The filing fees for a joint bankruptcy are the same for an individual however the cost of an attorney to handle your joint bankruptcy would be considerably less than if you each hired an attorney to handle your bankruptcy. Filing bankruptcy prior to divorce also makes the process of debt division easier. Bankruptcy and divorce combine to make stressful situations even more so.
Bankruptcy and divorce is a common situation especially when one finds themselves with half of the income but not half of the debt. It is also possible that one spouse also has spousal maintenance or child support or both in addition to their regular debt. If your ex files bankruptcy after your divorce there are a few things you need to know:
You might be the “ex” but as far as bankruptcy goes you are another creditor. What this means is when the bankruptcy petition is filed and the automatic stay kicks in, if you are receiving payments or support from your ex, they will stop. If you call asking your ex for the payments you are in violation of the stay. You will likely need to obtain relief from the stay and that requires a motion and filing fees. If you find yourself in this situation it is best to lawyer up again and have them get to work getting your support going again. You may need to file an adversary to complaint make sure your spouse doesn’t get out of paying any marital debts that are listed in a property settlement.
If your ex files bankruptcy it’s likely that bankruptcy is in your future also. When divorce and bankruptcy collide, it is best to consult with an attorney as early in the process as possible.