When 2 Bad Things Come Together - Bankruptcy and Divorce

Differences in the management of money, debt, and finances are often cited by many couples as an underlying reason for divorce. Along with being the cause of a divorce, marriage is also a contract, and the division of assets and debts is required. This often leaves one or both parties without the income necessary to meet their ongoing financial needs. For the average American, the need for a lawyer’s guidance is rare. For some, there may be times when more than one of these needs coincide.

Two Incomes Often Become One

A common reason for bankruptcy is a divorce. While many Americans encounter financial challenges every day in their marriages, a divorce can be a very destabilizing force. Even if both parties to the marriage have jobs, the creation of two households can cause numerous new expenses, such as renting apartments or one party’s effort to buy the other party out of the family home, plus the added burden of child support costs that can create a tipping point.

Another issue is joint debt from the marriage. Your marriage dissolution is carried out by a contract between you and your former spouse. However, your contract does not alter the terms of the agreements that you make with lenders or financial institutions.

So, if your ex-spouse received a car as part of the divorce settlement, if the loan obligation was joint, should he or she fail to pay, the lender could demand you pay. If your former spouse filed for bankruptcy and obtained a discharge for that debt, the lender would certainly look to you for payment.

The same is true for joint credit cards, and if your former spouse had significant credit card debt, you should attempt to have that debt paid off prior to the completion of the divorce, because as with a car loan, if your ex-spouse files for bankruptcy, the creditor (or collector) would look to you to satisfy the debt.

Experienced Attorneys at the Bond & Botes Law Office are here for you

If you’re in the process of divorce or considering divorce and have serious debt problems, it is in your best interest to talk to an experienced local bankruptcy attorney before making any decisions about how best to proceed. You can schedule a free consultation with one of the knowledgeable bankruptcy attorneys at Bond & Botes by calling 1-877-581-3396 or filling out our contact form. We have offices in Alabama and Mississippi.