Myth: If I file for bankruptcy after my divorce, I wont have to pay any of the marital debt that I was ordered to pay.
Truth: If the court orders you to pay marital debt, you may still be required to do so even if you receive a bankruptcy discharge post-divorce. Many times married couples are co-debtors on a substantial amount of their debts. If you file for bankruptcy and you were ordered to pay this debt, though your name will fall off of this debt and the creditors will pursue your ex. Your ex may sue you and receive a judgment for the amount(s) due.
Myth: If I file for bankruptcy during my divorce there wont be any problems with property distribution.
Truth: Many judges are reluctant to make rulings on the distribution of property if one or both spouses are in the process of a Bankruptcy during the divorce proceedings. It is suggested that you file for and get your bankruptcy discharge either before you file for divorce or after you file for divorce depending on your financial situation.
Myth: Once my spouse and I separate, we cannot file jointly for bankruptcy.
Truth: Even if separated, you may file jointly for bankruptcy, however, many bankruptcy attorneys are reluctant to do so because of the future conflict of interest that will present itself. If you are considering bankruptcy after a separation consider filing individually. It will be very hard to continue in a chapter 13 bankruptcy once a divorce is granted.
If you are divorced or soon to be divorced and are considering bankruptcy, please consult legal counsel with knowledge on both the laws on Divorce and Bankruptcy. For more information or to contact Attorney Sharnae Smith at Smith Legal Services, LLC, please click here.