As of 2014, the most recent year of data gathered by the Centers for Disease Control, the divorce rate in the U.S. is 3.2% per 1,000 people. Debt and financial strain are the top causes of divorce, but even when debt is not to blame, dividing up a family may be a significant budgetary hardship. Both partners must now contend with comparable living expenditures and less income to cover them. It’s not uncommon for divorcing spouses to consider bankruptcy before, during, or after the divorce is finalized. Knowledgeable bankruptcy attorneys can offer guidance throughout the procedure and answer your questions.
If both spouses owe debt secured by a car or a property, both parties may find a middle ground, or the divorce court may rule that one spouse is liable for paying off the debt while the other remains bound by it. The outcome? Credit damage and hassles for the non-paying spouse that might last for years after the divorce.
They Will Help Get the Debts Discharged
If a person files for bankruptcy, most of their obligations are dischargeable, meaning that the party is no longer legally obligated to repay them. However, child support and alimony are not dischargeable, and these debts will survive the bankruptcy proceeding. Similarly, parties cannot discharge property settlement contracts in a Chapter 7 bankruptcy but can do so in a Chapter 13 bankruptcy. A Chapter 13 bankruptcy can prevent creditors from pursuing collection actions against the other ex-spouse.
They Can Help Eliminate Divorce Lawyer Fees
If a party owes legal debt related to a divorce action, such as attorney’s fees, this debt can often be erased in bankruptcy. But, this only suffices if the bankruptcy is filed after the divorce. If the court did not require the payment of divorce attorneys’ fees in a child support judgment, they will be deemed dischargeable regardless of whether the attorney files a complaint. Bankruptcy attorneys have the experience to ensure you will not be blindsided.
Divorce is a significant cause of bankruptcy filings. Numerous individuals who have gone through a divorce encounter financial difficulties. They may have problems paying their expenses on a single salary or due to their domestic support responsibilities. Regardless of the reason for entering bankruptcy after a divorce, you must discuss your options with your divorce attorney and bankruptcy attorney. For legal help during this difficult time, give Woodworth & Holter, PLLP a call. We can help you through your bankruptcy.