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Bankruptcy During Divorce.

So we have talked about bankruptcy after divorce, what it affects what it does not affect after your divorce.  It will not allow you’re ex spouse to not pay child support or alimony after divorce. If there is talk of a divorce in your marriage, if you know it is coming and you have a lot of debt, it is cheaper to file a joint bankruptcy then separate and bankruptcy during divorce can get confusing and have many conflicts of where the debt is going.  So if you know there is a lot of debt that is going to be split up during the divorce and you are both going to have to file bankruptcy anyways, file together before you start the divorce, yes it takes longer, but in the long run can save you lots of money in the future. If you do not see the divorce coming and your ex files bankruptcy during the divorce, we talked about a hold harmless clause that should be in your divorce order, especially if your ex has taken on the mortgage and any land payments. As we discussed before the hold harmless clause in divorce papers, will not allow your credit to go along with you having to make the payments. So what happens if you both have not discussed a divorce; one of you did not see it coming; or the thought of bankruptcy before, did not enter your mind before the divorce; what happens to the property settlements during the divorce while bankruptcy has been filed at the same time?  This can get extremely confusing.  First off if you file bankruptcy on property settlements during a divorce those are considered nondischargeable, so I know your asking what this means, it means that the person that has filed for bankruptcy during the divorce can not have those debts wiped away, although if the person can show they can not take care of themselves at all, with the debt or, taking away the debt of the person filing will not do any harm to the former spouse and children in the marriage by not paying the debt.  Another reason that if you both want the divorce and there is a lot of debt do bankruptcy before hand, and then get your divorce, this will save a lot of time, money, and heartache.   Remember when you are going through a bankruptcy in the middle of the divorce, everything becomes part of the bankruptcy estate and they may use property, land, and other items to pay off the debt in the marriage.  This means you both may end up with nothing. Take the time to really think about divorce and discuss it with your spouse, of course you both may not be getting along but it is important to sit down and try to tell the one you have been married to for how ever long, the different affects the divorce can have.  So discuss the debt that you have, what you would like in the divorce and not like.  Also if either one of you would even have to file for bankruptcy after the divorce is over, calculate, what you would be spending out, what debt you would be taking over.  Sometimes even if it takes longer to get through a painful situation, it can save a lot of pain in the future!   

 

Posted: Dec 14 2007, 08:07 AM by Divorce | with no comments
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