How to file bankruptcy after a divorce
- Collect your documents. ...
- Take credit counseling. ...
- Complete the bankruptcy forms. ...
- Get your filing fee and file your case. ...
- Mail documents to your trustee. ...
- Take bankruptcy course 2. ...
- Attend your 341 meeting. ...
Is it better to file bankruptcy before or after divorce?
One pro of waiting until after your divorce is final before filing for bankruptcy is that only your income can be considered in the means test that the court applies. So if you are divorcing a large income earner and want to file for Chapter 7 as opposed to Chapter 13. Then it might be best to divorce first.
What happens if you file bankruptcy during a divorce?
If you file for divorce during the course of a bankruptcy, the divorce court will not have jurisdiction over any of your assets or liabilities that are part of your bankruptcy estate. The divorce court can get jurisdiction to dissolve the assets and liabilities of your marriage if your bankruptcy stay is lifted.
Can I take out debt before filing bankruptcy?
Purposely running up credit card debt before filing for bankruptcy is a bad idea. The general rule is that you can discharge most credit card debt in bankruptcy. Whether your credit card debt is $1,000 or $100,000, the bankruptcy discharge you receive at the end of a successful bankruptcy case will wipe out your liability on the debt.
Can my ex-spouse file for bankruptcy after our divorce?
Anyone may file bankruptcy after divorce, including your ex-spouse. If you had joint debt with your ex-spouse, then you may be responsible for the debt that you held with them. Creditors do not automatically separate debt upon divorce.
Can bankruptcy affect divorce settlement?
The Effect of Bankruptcy on Divorce Settlements The automatic stay does not affect any aspect of your divorce except the division of bankruptcy estate property. The divorce court cannot divide property that is already in a bankruptcy estate, whether that is the family home or stock or mutual funds.
Is it better to file bankruptcy before or after divorce?
If your divorce is filled with conflict, it may be best to wait until the divorce is final before you file for bankruptcy. This can allow you to seek a discharge of your debts without having to depend on your spouse working together with you in your bankruptcy case.
Can I file bankruptcy on my ex wife?
First, the good news. Any debt owed to you by a former spouse for child support or alimony, also referred to as spousal support or maintenance, cannot be discharged in bankruptcy. In fact, a person cannot successfully complete a bankruptcy if child support payments are not kept current.
Can a husband file bankruptcy without his wife?
Can I File Bankruptcy Without My Spouse? Yes, you can file for bankruptcy without your spouse, and it's a good idea when most of the debt is in your name alone. Your spouse will be able to maintain a good credit score and will be able to file for bankruptcy in the future if needed.
Can my ex husband bankruptcy affect me?
In terms of your credit score, an ex's bankruptcy should have little to no effect. Scores are individual even with joint or cosigned debt obligations. The risk to your score could increase if you are held responsible for more debt than originally decided and you struggle to make payments.
How does bankruptcy work in divorce?
If both cases are pending simultaneously, bankruptcy is typically suspended until the divorce court apportions marital debts and assets to each party. Juggling the two legal actions will only complicate your situation, so for simplicity's sake, you may want to consider filing for divorce before tackling bankruptcy.
What happens if my ex husband files for bankruptcy?
If your ex-spouse filed a chapter 7 bankruptcy and those debts were discharged by the courts, then the co-signer becomes responsible for those debts. That means those debts become your responsibility.
What happens if my ex declares bankruptcy?
Therefore, if one person declares bankruptcy, the other person in the relationship will have to continue making full payments on any joint debt remaining. If you file for bankruptcy to eliminate your debts, your creditors can go after your ex-spouse for the full amount of any joint debts you had while together.
Have a Question About Child Support, Alimony and Bankruptcy?
If you’re interested in learning more about discharging your divorce-related debt or have other questions about bankruptcy options, contact the bankruptcy law attorney at the Semmes Law Firm and let us guide the way.
What happens if a spouse is obligated to pay a divorce debt?
If a spouse is obligated to pay a divorce-related debt, the indemnification language would make it near irrefutable that the non-filing spouse has legal standing to challenge the treatment and classification and dischargeability of a debt included in the filing spouse’s bankruptcy.
What is a hold harmless debt?
Hold-Harmless Debts. When an order or agreement contains language that orders Spouse A to hold harmless or indemnify the Spouse B for a debt that Spouse A is to pay, the Court is creating a potentially non-dischargeable debt – the indemnification debt from Spouse A to Spouse B.
Why was Giddens' debt not dischargeable?
The court denied some of the grounds but ultimately, agreed that Giddens debt was not dischargeable because it was procured through fraud. More specifically, the court found that at the time Giddens entered into the marital settlement agreement, he had no intention of living up to his obligation to pay and transfer property to Morales.
Why did Giddens go to jail?
Instead, Giddens spent years attempting to avoid his divorce obligation. He went so far in this attempt that he landed himself behind bars for contempt of court and his testimony was disregarded by the court. The bankruptcy court went so far as to characterize Giddens as the most unpersuasive witness it had ever seen who was “incapable of telling the truth.”
What to consider when drafting a divorce agreement?
Protecting the Non-Filing Spouse in a Chapter 13. There are several items that should be considered when drafting a divorce agreement or judgment and trying to avoid issues and protect the non-filing spouse in case of a Chapter 13 filing.
How to protect a client in a divorce agreement?
Another way to protect a client in a divorce agreement or order is to reserve the issue of alimony for failure to abide by the orders of the court, including payment of the debts.
What happens after bankruptcy?
After the sale, any outstanding debt is discharged and you are no longer responsible for paying it. No property is sold in a Chapter 13 bankruptcy. Instead, a repayment plan is put into place based on your income, to be paid over time.#N#Read More: What Happens After Bankruptcy Discharge?
How does a divorce work?
Most states allow couples in a divorce to specify by agreement how marital debt should be divided. If they cannot agree, the court will apportion the debt based on state law. Some states treat debt as community property and divide it equally between spouses, while other states allocate the debt according to what is considered "fair." In considering what is fair, a court will look to several factors, including each spouse's ability to pay.
What is an indemnification clause in a divorce?
In cases where a couple co-signed on a debt, such as a car loan, either the parties or the court may insert an indemnification clause into the divorce decree or settlement agreement. These provisions are meant to protect against a scenario wherein the debt balance is assigned to one spouse who then discharges the debt through bankruptcy, leaving the other spouse potentially liable to the creditor. Thus, an ex-spouse is prevented from later arguing during a Chapter 7 bankruptcy that the debt was not made in connection with a settlement agreement or divorce decree. The indemnification clause creates a new obligation at the time of divorce and is not dischargeable.
Can you discharge debts in Chapter 7 bankruptcy?
Federal law provides specific exceptions to discharge for marital debts. In a Chapter 7 bankruptcy, if the bill was either incurred during a divorce or separation or in connection with a marital settlement agreement, divorce decree or other court order, it is not dischargeable. This covers most bills and includes unsecured debt, such as credit cards, which are normally dischargeable. By contrast, this exception does not apply to Chapter 13 bankruptcy filings, which does allow discharge of unsecured marital debts, even those incurred during the divorce.
How to file for bankruptcy while divorce is pending?
How to file bankruptcy after a divorce. Collect your documents. Take credit counseling. Complete the bankruptcy forms. Get your filing fee and file your case. Mail documents to your trustee. Take bankruptcy course 2. Attend your 341 meeting.
What is Upsolve for bankruptcy?
Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool
What is an indemnification clause in a divorce decree?
This means that one spouse is agreeing to make the other spouse whole if they suffer losses from a joint debt. For example, in a divorce decree, one spouse might agree to take on a joint car loan and indemnify the other spouse from any losses.
What to do if divorce is not final?
If your divorce is not yet final, it may make sense to address debt relief and file for bankruptcy before divorcing. There are pros and cons to this, and it’s important to consider all of them carefully. First, as soon as you file a bankruptcy case something called the automatic stay goes into effect. This stops any other court proceeding from continuing until the bankruptcy is complete. The automatic stay does not stop the court from creating or enforcing any support payments. It does, however, include all other aspects of divorce cases and can cause a significant delay in completing that proceeding, so it’s important to consider your priorities.
How long does it take to get a copy of a divorce decree?
Additionally, even though the divorce decree is not filed with the court, your case trustee will request a copy of it before your 341 meeting, which happens approximately 30 days after the case is filed.
How much does it cost to file for bankruptcy?
Once you’ve completed the paperwork, you’ll need to get together your filing fee. The current filing fee for Chapter 7 is $338 , which is due in full when you file your Chapter 7 bankruptcy case with the court. It’s the same amount for single and married filers. The payment must be paid by cashier’s check or money order, you can’t make this payment using a credit or debit card. If you feel that you can’t afford this fee, you can request a fee waiver, provided you are earning less than 150% of the federal poverty line, considering your combined household income. If the waiver request is not granted (or you do not qualify), you can also request to pay the filing fee in installments .
How many documents are needed to file for bankruptcy?
This can take a little time as there are usually more than 20 documents to complete, including your bankruptcy petition, all of the schedules, the statement of financial affairs (SOFA), and more. After a recent divorce, there are some specific details to note.
What happens to your tax refund when you file bankruptcy?
JS: Because, when you file bankruptcy, the bankruptcy trustee takes control and possession of all of your assets until they are abandoned or are determined to be exempt. Certain portions of a tax refund may be exempt, but usually it is a non-exempt asset.
What assets can a trustee take?
Other similar types of assets a debtor might receive in the future, which the trustee could take, include an impending inheritance or the settlement from a pending personal injury case, if they stem from an event that happened prior to the bankruptcy petition date.
How does bankruptcy affect divorce?
Bankruptcy Can Affect a Divorce Settlement / Advantages, Disadvantages, and Misunderstandings of Bankruptcy. You can use a Chapter 13 plan to catch up on child support arrearage or spousal maintenance support (alimony) arrearage. If you have received a Chapter 7 bankruptcy discharge, you may still be obligated to relinquish to ...
What is the role of a Chapter 7 trustee?
JS: One of the roles of a Chapter 7 trustee is to determine if you qualify for a Chapter bankruptcy. A second role is to determine if the debtor has any non-exempt assets that can be liquidated for the benefit of creditors.
What happens when you get discharged from Chapter 7?
So, when people receive their Chapter 7 discharge, they sometimes forget about their non-exempt assets, because they might not have received their tax refund at the time they filed their case, but they have accrued their rights to at least a portion of their tax refund. That portion is what becomes an asset.
How long do you have to file Chapter 13?
CH: Sometimes people must file Chapter 13 case because it has been less than eight (8) years since they filed a previous Chapter 7 case, which renders them ineligible to file another Chapter 7 until it has been more than eight (8) years since the date of filing the previous Chapter 7 case. In other words, if they desperately need debt relief during that eight-year time frame, they must file for relief under Chapter 13 of the U.S. Bankruptcy Code.
How much did Chris Holmes pay his ex wife?
Chris Holmes: Recently I had a client who, in his Decree of Dissolution of Marriage, was ordered to pay his ex-wife $900 per month for 10 years. He provided me with a copy of his settlement agreement, so I could look for language that indicated whether or not that monthly payment was in the nature of property settlement or if it was in the nature of alimony or maintenance.
Can I Discharge Alimony or Child Support in Bankruptcy?
You will need to continue to make payments. While it’s possible that discharging other forms of debt can make it easier for you to pay child support, there is no way to discharge child support that is owed by filing for bankruptcy.
Have More Questions About Bankruptcy After Divorce?
If you have any questions regarding bankruptcy after divorce, we are always there to answer your questions. Feel free to call us or contact us today .
How does divorce affect bankruptcy?
When you file for bankruptcy, you want to ensure that there is a substantial net gain for you as you will now have the burden of rebuilding your credit. You want to make sure that all of your debts are discharged and the chances of passing those debts to your ex-spouse are minimized . Allmand Law Firm, PLLC offers expert representation in matters of bankruptcy. We can help ensure you get the best result when you file and begin to prepare for your financial future.
What happens when you file for divorce?
When you file for divorce, marital property is rolled into a marital estate and a determination is made as to who gets what property. On the other hand, debts are divided in the same way. You can use this during divorce negotiations to come up with an equitable solution, but the debt is separated in the same way that your marital property is.
How long before bankruptcy can you settle a divorce?
If a debtor signs a divorce settlement with a non-filing ex-spouse six months or less before filing bankruptcy, the debt settlement may be reduced by the bankruptcy trustee. However, if the debtor and the non-filing ex-spouse reach a divorce settlement six months or more before the bankruptcy filing, it is unlikely that ...
What happens if an ex spouse files for bankruptcy?
If an ex-spouse decides to file bankruptcy after a divorce settlement, their finances will be taken over by the bankruptcy trustee. The bankruptcy trustee will be responsible for managing the debtor’s assets and distributing payments to creditors. An ex-spouse with a divorce settlement will be a claimant or creditor in the bankruptcy.
Can you file for bankruptcy with both spouses?
If both spouses file for a joint Chapter 7 bankruptcy, they can discharge all of their marital debt together and then proceed to divorce without having to worry about dividing marital debt. On the other hand, both spouses will now have the bankruptcy on their credit report.
3 attorney answers
Whether you can discharge all or part of the $10,000 owed to your ex depends on the what the money is payment of. The previous commentors are correct in that the debt is not dischargeable if it is for alimony, spousal or child support.
Scott Douglas Jordan
That depends on what it is for. If it is for alimony, spousal support, or child support, the short answer is "no". The 2005 amendments to the Bankruptcy Code refer to these as "domestic support obligations", and they are generally not dischargeable under any chapter of the Bankruptcy Code.
Michael W. Gallagher
If it is part of the bankruptcy decree it is not a judgment. If it is a property distribution you may be able to discharge it in a chapter 13 but a chapter 7 will not discharge it. If the order is in the nature of an order of support it could be found to be non-dischargeable.
What happens if you file for bankruptcy first?
If you file for bankruptcy first, you and your spouse will only have to pay one filing fee and can share the legal fees of your bankruptcy attorney. Filing for bankruptcy first can also make the property division portion of your divorce case simpler. In a normal divorce, the court will divide both the assets and the debts.
What happens if you don't file for bankruptcy?
If you do not obtain a discharge of a debt through bankruptcy, the creditor can seek to collect what is owed regardless of the family court’s orders. If it is discharged in a bankruptcy that you and your spouse file before you file for divorce, the creditor may not engage in any further collection activities for that debt against ...
Why is my divorce delayed?
This is because both your divorce and bankruptcy cases will impact each other, causing the cases to be delayed. When you file for bankruptcy, your non-exempt assets will become a part of your bankruptcy estate. This means that the judge in your divorce case will not be able to divide your assets until your bankruptcy case is concluded.
How long does a Chapter 13 bankruptcy last?
By contrast, a Chapter 13 bankruptcy is a type of bankruptcy that involves you entering into a repayment agreement that will last between three and five years. If you and your spouse file for Chapter 13 bankruptcy before your divorce, it will be a long time before your shared repayment plan is completed. Unless you and your spouse are very ...
What is Chapter 7 bankruptcy?
In Chapter 7 bankruptcy, your non-exempt assets will be liquidated to repay a portion of what you owe to your creditors. In many cases, most of the assets that are owned by a debtor are exempt, meaning that you may lose few assets in a Chapter 7 bankruptcy.
Do you have to pay debts after divorce?
In a normal divorce, the court will divide both the assets and the debts. If you and your spouse secure a discharge of your unsecured debts, neither one of you will have to pay them after you receive the discharge. This means that the court will not need to divide them.
Can a judge divide a debt?
This means that the court will not need to divide them. It is also important to note that if a judge orders your spouse to pay a debt that you share, the court’s order will not impact the creditor. Since the creditor is not a party to your divorce, it can go after either you or your spouse to collect payment.
What happens to the income in Chapter 13 bankruptcy?
In a Chapter 13 bankruptcy case, the court determines how much disposable income the filer has to put toward his or her repayment plan. Filing for divorce and acquiring new financial obligations, like alimony and child support, will reduce the amount of disposable income an individual has available. This can alter his or her repayment plan and even ...
What to do if you are going through Chapter 13?
If you are working through Chapter 13 and considering divorce, or if you are going through a divorce proceeding and are considering filing for bankruptcy, talk to your bankruptcy lawyer about the specific ways you can expect the divorce to affect your bankruptcy.
Can a former spouse become a creditor?
A Former Spouse Can Become a Creditor. When a divorce settlement leaves one spouse indebted to the other, the spouse who is owed money can become a creditor in the other spouse’s bankruptcy case. This means that the debt the filing spouse owes his or her former partner is covered by the bankruptcy case and the owed spouse’s rights ...
Can you discharge alimony debt in bankruptcy?
You cannot discharge alimony debt or child support debt through bankruptcy. However, in certain circumstances, you can discharge other personal debts, like credit card debt and debt you owe your former partner for reasons other than alimony or child support, like buying out a share of your family home. Your lawyer can discuss which debts are dischargeable and which are not with you to help you determine whether bankruptcy is the right choice for your debt management.
Can a divorce court divide assets in bankruptcy?
The Divorce Court Cannot Divide Assets in the Bankruptcy Estate. When you file for bankruptcy, your non-exempt assets go into the bankruptcy estate. This is the pool of legal and equitable interests you hold at the time of the bankruptcy. Once property is in the bankruptcy estate, a divorce court cannot divide it between spouses.
Chapter 7 and Chapter 13 Bankruptcy Information
Obligations Related to Domestic Support
- The question of domestic support is a common one when filing bankruptcy. Domestic support is considered alimony and child support, or any monies related to maintenance of the family. The court will take a look at federal law in order to determine what debts related to divorce are dischargeable. It is a case specific determination. It also is dependent on the intent of the partie…
The Way The Court Looks at Debt
- If there is a situation where the ex-wife still lives in the house and the husband has moved out, the husband would then be responsible to make the mortgage payments. The court would interpret this as a domestic support obligation. This domestic support application would not be dischargeable under a chapter 7 bankruptcy or a chapter 13 bankruptcy. If the husband was to p…