Money is a issue at the forefront in many divorce cases. Often times there are large debts that have been accumulated during the marriage and usually one spouse believes the other is largely responsible. As a general rule, both spouses are responsible for the debt that was accumulated during he marriage. If one or both of the spouses decide to file Bankruptcy and there is a divorce that is either pending or final, it is necessary to be protected.
Whether a Chapter 7 or Chapter 13 bankruptcy is filed depends on several factors, one of the factors is your income and another is the number of people you have to support. A Chapter 7 bankruptcy, often called a no asset bankruptcy, will request complete discharge of your debts. A Chapter 13 bankruptcy, often called a repayment plan bankruptcy, will request a repayment plan to repay your creditors over a period of years. Married couples can file a joint bankruptcy.
It is necessary to be aware that when a divorce divides up the debts between the Husband and Wife and makes them liable for specific debts – that agreement or judgment is only between the two parties. It does not incorporate or involve the actual creditor. If the Husband was ordered to pay the joint Visa bill of $10,000 and the Wife was ordered to pay the joint Master Card Bill of $10,000 in the final divorce Judgment and the Husband files for Chapter 7 bankruptcy and is discharged from paying the $10,000 joint Visa bill, the Visa company will look to Wife to pay that amount – no matter what the Judgment for divorce says.
There are ways to protect from this happening and it is wise to discuss these possibilities with an attorney if bankruptcy and divorce are in your future.