Money problems can lead to divorce. Filing for bankruptcy and divorce at the same time can seem to make a lot of sense, especially if you ran up credit card debt while you were married. But bankruptcy and divorce are two separate legal processes that are sometimes at odds with each other.
Bankruptcy During Divorce
Filing for bankruptcy during your divorce can slow down the process. Divorce courts can make rulings on custody, visitation, child support, and alimony when a bankruptcy is in progress. A state divorce court can't make decisions about your property, however, as long as the federal bankruptcy court has control over it.
You May Still Have to Pay Joint Debts
If you have to pay certain debts as part of your divorce decree, you might think about filing for bankruptcy to wipe them out. Your creditors can't come to you for payment if you file for bankruptcy after your divorce, but they can still look to your ex-spouse for payment of debts you signed for together. An ex-spouse who has to pay these debts even though the divorce court ordered you to do it can usually take you back to divorce court. Often, the court will order you to pay her back - or you'll end up paying the debts anyway.
Bankruptcy Can't Eliminate Certain Divorce Debts
Your divorce decree might order you to make payments to your spouse in exchange for property. You can't wipe these out if you file for Chapter 7 bankruptcy but, if you file for Chapter 13, you can usually roll them into your payment plan. With a Chapter 13 bankruptcy, you give your trustee your extra income each month, after you pay your necessary bills, and the trustee distributes this money among your creditors, including your ex-spouse. At the end of your Chapter 13 plan, if you still owe money to your ex-spouse, that portion of the debt is usually eliminated.
You Still Owe Child Support and Alimony
If you owe your ex-spouse past-due alimony or child support as part of your divorce decree, you can't erase these debts in a Chapter 7 or a Chapter 13 bankruptcy. In fact, the bankruptcy court won't grant you a Chapter 13 discharge, finalizing your case, if you still owe past-due child support or alimony.
A Personal Bankruptcy Lawyer Can Help
The law surrounding divorce and personal bankruptcy is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a bankruptcy lawyer.