Common Questions about Bankruptcy and Divorce

Questions about Bankruptcy and Divorce

Dealing with financial issues during marriage is common but for some couples, money issues contribute to relationships that have gone downhill. With divorce being imminent, a spouse may become curious about what debt is owed, who will be responsible for paying it and what happens if someone isn’t able to pay.

Since there are multiple issues that may come up it helps to discuss your situation with a legal expert to understand your rights and obligations but below are answers to some common questions:

Should divorce come first or bankruptcy?

This will vary depending on your unique situation. Filing jointly may be an option for spouses able to cooperate with each other during proceedings. Couples may decide to file a joint bankruptcy which may be cost effective and ease divorce settlement issues.

What if my spouse wants to file on their own?

A spouse has the option to file on their own but debt incurred during marriage could be the responsibility of both spouses. A creditor may decide to pursue the non-bankrupt spouse for payment. Since divorce court only assigns debt it doesn’t prevent a creditor from collecting from either spouse. The non-bankrupt spouse may choose to file bankruptcy on their own to avoid collection attempts.

Can a spouse file bankruptcy when the divorce process has started?

If a divorce is pending when a bankruptcy is filed, it may slow down the process, especially related to financial matters including division of property and debt. The automatic stay associated with bankruptcy goes into effect, and in some cases, divorce will proceed when the bankruptcy case is closed.

What if my ex-spouse files bankruptcy after the divorce?

It is common for an ex-spouse to file when personal finances have changed. They may be granted a discharge on some debts but certain obligations such as child support and alimony cannot be discharged.