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Do you understand the intersection of divorce and bankruptcy?

One of the primary reasons for a marriage to end is the couple's financial struggles. These pose a serious problem because there is a chance that the difficulties with the money might lead to the need to file for bankruptcy. When both of these legal matters need to happen, the question becomes how to best handle them. Simultaneously pending divorces and bankruptcies present unique legal challenges for the litigants.

Divorce is a civil matter between you and your spouse. The court can't force creditors to abide by the debt allocation listed in your divorce decree. Because of this, any debts that are included in the divorce would still be considered joint debts by the creditors unless they willingly agree to pursue payment and hold only one party liable for the balance. This is what puts everyone in a bind.

Another issue that comes up is that if you divorce first, your debts might not be able to be included in a bankruptcy because the court order states only one spouse will pay for them. Conversely, if the bankruptcy is filed prior to the divorce, the spouse who files for bankruptcy might be relieved of their obligation to pay the debts.

Of course, there are various ways that laws might impact a person's payment abilities when bankruptcy and the legal end of a marriage overlap. It is always best to seek qualified legal advice on how to best handle the situation. Knowing how state and federal laws affect your financial and marital affairs can put you on better footing to emerge from divorce and bankruptcy relatively unscathed.

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66 Sunset Strip
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