What happens if you file bankruptcy after divorce?

Debts from divorce Some debts from a divorce proceeding can be eliminated in your bankruptcy. If you file Chapter 7 (or “liquidation”) bankruptcy then any money you owe your spouse from the property settlement is not a dischargeable debt. You will still owe that money after your bankruptcy is complete.

When getting divorced do you split debt?

As part of the divorce judgment, the court will divide the couple’s debts and assets. The court will indicate which party is responsible for paying which bills while dividing property and money. Generally, the court tries to divide assets and debts equally; however, they can also be used to balance one another.

Is it better to file bankruptcy before or after divorce?

When Does It Make Sense to File for Bankruptcy Before Divorce? A main advantage to filing bankruptcy before divorce is the potential for cancelling joint marital debts that would otherwise have to be divided up as part of divorce proceedings, and then tackled separately in each spouse’s bankruptcy.

How does bankruptcy affect ex-spouse?

If you’re filing Chapter 13 bankruptcy after a divorce, you will be responsible for repaying any debts attached to your name even if your ex-spouse is responsible for creating the debt. In this case, your ex-spouse would lose the property but would receive their portion of any proceeds earned from the liquidation.

How are credit card debts handled in divorce?

So, both spouses are equally liable. However, debts in your name incurred prior to marriage or after separation or divorce are not considered community debts. No matter where you live, division of debts may be less than straightforward.

Can a credit card debt be wiped out in bankruptcy?

Bankruptcy doesn’t protect you, unless you file as well. When an individual files for bankruptcy to eliminate a joint debt, the debt isn’t erased in bankruptcy court. It wipes out that person’s liability for the debt. The creditor can then pursue the remaining debtor — the one who didn’t file for bankruptcy — for the full amount.

What happens when you file for bankruptcy during a divorce?

Filing for bankruptcy first can also make the property division portion of your divorce case simpler. In a normal divorce, the court will divide both the assets and the debts. If you and your spouse secure a discharge of your unsecured debts, neither one of you will have to pay them after you receive the discharge.

What happens to your credit card if your ex-spouse files bankruptcy?

If your ex-spouse declares bankruptcy, then the card company can require you to repay the full balance — and your credit history will bear the full brunt of the bankruptcy filing even though you weren’t the one to file.