Divorce and Bankruptcy

A divorce can be financially devastating. Often before the divorce, the financial strength of a marriage is weak. Fighting over finances is a major reason for divorce.

First, if you are still married, it is much cheaper for a couple to file for bankruptcy together than to each file separately. It is important to discuss this with your attorney since if your financial settlement is within 6 months of your bankruptcy discharge, the Trustee can come after property if it would not be exempt as a single filing.

The divorce decree does not stop bill collectors from collecting the debt from you, even if your spouse was ordered to pay it. It is also possible that your spouse will file bankruptcy and that you will have to pay the debt. Seriously consider whether you or your spouse will file bankruptcy and what guarantees your spouse will pay. For instance, if he or she cannot afford the house, it may be best for you to either force the sale of house or to take the house (and the debt for it), rather than trust your spouse to pay for it. It is common for a spouse to file bankruptcy and sit in the house until foreclosure. The mortgage company will then attempt to collect from you. A situation like this could destroy your credit.

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