It’s no secret that money problems are one of the leading
causes of divorce. In fact, financial
woes are often what couples state as the reason their differences became
irreconcilable. Therefore, the situation
often arises that divorce and bankruptcy are considered simultaneously. While it’s possible to file for both at the
same time, it’s important to keep in mind that divorce and bankruptcy are two
completely separate legal processes, and each must be handled separately.
In fact, if you file for a bankruptcy while you are in the
middle of the filing process for divorce, the divorce proceedings can actually
slow down your bankruptcy. And while the
court handling the divorce will be able to make decisions regarding custody,
child support, and alimony while the bankruptcy process is happening, it will
have no jurisdiction over the couple’s mutual property – only the federal
bankruptcy court will have control over that.
Also, bankruptcy and divorce can be tricky when it comes to
jointly owned debt. If you are required
to pay off certain debts as part of your divorce decree and your bankruptcy
discharges these debts, your creditors could still go after your spouse if his
or her name was on the debt. Your spouse
can then take you back to divorce court to recover the debt, which will likely
be granted since it was in the original divorce decree. Chapter 7 and Chapter 13 bankruptcy also does
not discharge child support or alimony that is owed to your spouse as part of
the divorce decree.
The best thing to do is to wait until the divorce is
finalized before you begin your bankruptcy process. When you do it this way, the bankruptcy court
will look at your required alimony and child support expenses, and consider
these when determining your required monthly expenses.
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