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Bankruptcy Law Blog

Thursday, December 21, 2017

Divorce and Bankruptcy

Love and Marriage & Divorce and Bankruptcy

Frank Sinatra sang that love and marriage go together like a horse and carriage. He must have been on to something since he ended up getting married four times. If he was a less wealthy man, he might have added a verse or two to his song about divorce and bankruptcy, a couple of life events that are also tied closely together.

Divorce is one of the leading causes of bankruptcy in the United States. When you stop to think about it, it is not surprising that divorce often precedes bankruptcy. Splitting up means there are now two separate salaries supporting two separate households instead of two salaries supporting one household. Each partner must replace items that the other partner laid claim to. And there are obviously legal bills to contend with.

Filing for bankruptcy can help a divorcee get his or her finances under control, and his or her life back on track, but there are a few things potential filers should keep in mind.

First, filing for bankruptcy does not eliminate the responsibility to make alimony or child support payments, or wipe out payments that are overdue. If a court-ordered support payment is causing financial difficulty, the only way to get it reduced or eliminated is to go back to family court and ask for it to be adjusted.

Court fines or penalties and attorney fees related to a past child custody or support battle are also non-dischargeable. If you are finding these impossible to pay off, your best bet is to get them put into a repayment plan. The Chapter 13 bankruptcy process includes a repayment plan that lasts for three to five years, so that might be a good fit. Although many debts are dischargeable at the end of the Chapter 13 repayment process, court fines and attorney fees related to child custody or support will remain intact.

Timing is also important when it comes to bankruptcy and divorce. Filing for bankruptcy stops all other court actions a filer is involved with. If a divorce and bankruptcy overlap, the divorce will be put on hold until the bankruptcy is wrapped up.

Finally, filers must be aware that their actions might impact their ex-spouse. Even after a divorce is final, creditors can go after either party if a debt was incurred jointly. Creditors don’t care that the divorce gave the house and the mortgage to one partner and the car and the car loan to the other partner. If the partner with the car stops making payments or files for bankruptcy and gets the debt discharged, the creditor can seek payments from the partner that no longer has the car.

Anyone contemplating bankruptcy who has recently gone through a divorce needs to talk to an experienced bankruptcy attorney before making any rash decisions. It might be possible to fix some financial issues without filing for divorce, and certain steps need to be taken to make sure the lives of the potential filer’s ex-spouse and children are not inadvertently disrupted.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”