Saturday, August 17, 2019

The Debts After Divorce That Don't Go Away in Bankruptcy

Divorce is an expensive process.  First, you have to hire a family law attorney - and possibly use credit cards to pay such a large expense.  Then you have to pay court filing fees, process servers and related expenses.  After divorce you may have to establish a new household which means new rent or mortgage, maybe another car and everything else that goes into establishing a new home.  Those additional expenses can be bad enough, and for many people mean additional credit card debt.  Unfortunately, some people coming out of divorce also face new expenses in the form of spousal support and child support.  With credit card debt, additional living expenses, and domestic support obligations many people wonder whether bankruptcy after divorce is a solution.

Credit Card Debt After Divorce


The good news is that credit card debt is generally dischargeable in bankruptcy.  Credit card debt that is unsecured can be eliminated in chapter 7 bankruptcy and chapter 13 bankruptcy without much difficulty.  The only exception pertains to very recent credit card debt which may be vulnerable to claims of "bankruptcy fraud."  Nevertheless, with the guidance of a local bankruptcy attorney credit card debt is one of the easiest forms of debt to eliminate in bankruptcy.

Child Support and Spousal Support After Divorce


Whereas bankruptcy can provide relief with respect to credit card debt, it does not relieve debtors of their obligation to pay past and future child and spousal support.  Simply put, domestic support obligations as defined in the bankruptcy code include child support and spousal support - and unfortunately, the bankruptcy code makes domestic support obligations non-dischargeable in chapter 7 bankruptcy and chapter 13 bankruptcy.

No comments:

Post a Comment