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Bankruptcy Filing After Divorce: What You Need to Know

When Couples Go Their Own Ways Bankrupcy Can Still Linger

Divorce can be hard, we understand, and bankruptcy filing after divorce can be even harder. So often people are wrapped up in the emotional aspects of a divorce they completely forget about the financial impact a separation can have on their money.

Financial aspects of a divorce such as dividing assets, figuring out support payments and dealing with joint debt payments should be on the To Do List when a couple decides to part ways.

On a good day, filing for bankruptcy can be too much to handle. When you add the emotional aspects of a divorce, it can be a lot to deal with. That’s why we’re here to help. Our experts can walk you through the steps of bankruptcy filing after divorce and explain how it impacts not only your current financial situation, but also your future finances.

If you declare bankruptcy

If you and your ex-spouse accumulated debt with joint credit cards, loans or lines of credit while married, those debts aren’t forgotten when the marriage ends. If your divorce left you with unmanageable and overwhelming debt bankruptcy may seem like a good solution to your money troubles.

According to Investopedia “Bankruptcy offers an individual a chance to start fresh by forgiving debts that simply can’t be paid while offering creditors a chance to obtain some measure of repayment based on what assets are available.”

A personal bankruptcy will be reported to the credit bureaus and have a long lasting impact on your credit score. According to credit experts Experian, a bankruptcy can remain on your credit report for up to 10 years.

Filing for bankruptcy after divorce doesn’t affect your ex-spouse’s credit history -- and vice versa -- because each of you have your own credit score. That being said, just because one person files for bankruptcy after divorce it doesn’t relieve the other spouse from the debt obligation.

If your spouse declares bankruptcy

Joint debt means just that -- it’s joint. You and your ex-spouse are both equally responsible for the total outstanding debt, regardless of your relationship status. If you’re each paying off half the debt and one day your spouse is unable to make payments the entire debt can fall on your shoulders.

Yes that’s right. If your ex-spouse can no longer make monthly payments for your joint debts, the financial obligation can become yours, and yours alone.

This will have a major impact on your monthly budget because increased debt payments means cutting expenses elsewhere. If your ex-spouse declares bankruptcy it’s a good idea to sit down and go over your personal spending to ensure you stay on top of your monthly payments and don’t fall behind.

Learn from your past mistakes

Figuring out life as a single person can be difficult. After a divorce you may need to completely start over, and this includes your personal finances. If your spouse was the primary earner in the family you may need to find a job, and if you never managed the household money you may need to learn to live on a budget. If the end of a marriage is the beginning of debt you may be overwhelmed. The important thing is to get back on track as soon as possible.

We’ve helped over 300,000 Americans get out of debt, improve their credit score and learn to properly manage their money. If you or your ex-spouse are considering bankruptcy call us at 1-888-919-CESI and talk to one of our experts about how we can help.


8 Responses to Bankruptcy Filing After Divorce: What You Need to Know

  1. Sandie says:

    I heard you had to wait 3 years after your divorce to file chapter 7 is that true

    • Tracy East says:

      Hi Sandie – a divorce or bankruptcy lawyer would have to answer the specific legalities of a divorce filing impacts bankruptcy filing. I’m unsure of the law in this case! Best of luck.

  2. […] you are considering filing for bankruptcy after a divorce there are a few key factors you should keep in mind. Aside from working closely with an experienced bankruptcy attorney, you will also need to take […]

  3. Richard G says:

    Tracy hit it right on the head! Definitely ask a bankruptcy lawyer Sandie

  4. Regina Hagglund says:

    I have questions about filing

  5. Jon Vee says:

    I divorced my spouse because he is a financial nightmare. He ran up business debt. I have never been on his businesses, signed his checks, been on a bank account, hired a sub… nothing. I divorced him because I can’t control anything except me and I did’nt want to file bankruptcy. I believe you should pay your debts. I don’t know how he got loans in the first place. Horrible credit. Am I responsible for his stuff?

  6. Alice Carroll says:

    It’s good to learn that a bankruptcy can stay in a person’s record for about 10 years. A friend of mine is thinking about talking with a credit card debt bankruptcy lawyer since she is almost done with the proceedings of her ongoing divorce. One of the most complicated parts of the process was surely about settling the issues with all of their joint credit cards throughout the years they were married.

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