Divorcing? Consider a JOINT Bankruptcy With Your Ex.

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By: Bill Henry
PublishedJun 9, 2020
2 minute read

Divorce is one of the top reasons people file for bankruptcy. If you and your soon-to-be ex-spouse have considerable debt already, the break up may exacerbate your financial situation. In this article, attorney Liz German discusses how a joint bankruptcy may be the solution for the two of you as you move forward separately.

Wondering if a Joint Bankruptcy is Right for Your Divorce?

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Bankruptcy & Divorce

If you’re thinking of, in the process of, or are already divorced and want to file a bankruptcy, there are a few things that you should consider.

Divorce itself is hard enough without throwing a bankruptcy into the mix. But there is a way to make the bankruptcy process less challenging.

Reasons to Consider a Joint Bankruptcy

If you’re considering or in the process of getting a divorce, you might want to contemplate a joint bankruptcy with your spouse if there’s any joint debt or even if you both have individual debt.

It might feel weird to talk to a soon-to-be ex-spouse about doing something together like filing a joint bankruptcy, but really it could be a great option for both of you if you both have debt, so we encourage you to speak with a bankruptcy attorney.

It Can Save You Money

It’ll also save you money in attorneys fees and filing fees by filing a joint case as opposed to individual cases and could save you money in the long run by not being forced into a Chapter 13 bankruptcy.

It Can Give You More Options

And here’s why I say that. If you’re already divorced and are ordered to pay for any joint debt, you might be limited to filing only a Chapter 13 bankruptcy. This is because there’s no protection in the Chapter 7 bankruptcy from being held in contempt of court for violation of an order to pay a joint debt. There is that protection in a Chapter 13 bankruptcy.

However, Chapter 13 bankruptcies are a lot more costly than a Chapter 7 bankruptcy.

This can all be very confusing and a complicated topic, so ultimately, if you’re already divorced, speaking with a bankruptcy attorney about the specific debts that you’re ordered to pay from a divorce will help you find out what chapter of bankruptcy is the best option for you.

Bankruptcy & Support Payments

A question we also often get is whether you can discharge future or back-due child support, alimony, or maintenance. This is called a domestic support obligation, and the answer is no.

You cannot discharge a domestic support obligation. Certain other debts owed to a child, a spouse, or a former spouse could also be non-dischargeable.

So again, speaking with a bankruptcy attorney about your specific situation is so important, because no case is one size fits all.

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