Bankruptcy And Divorce
Author: Natalia Kobseva
It is one of those unpleasant topics to discuss. But in reality - it happens. Two people come together with love and optimism to start a new life together and then it all falls to pieces. Such is life.
Divorce can be amicable or it can be a real war of the roses. And things can get extremely messy and ugly when it comes to the division of assets and liabilities. One party might unwisely or even worse - spitefully consider to file for bankruptcy if they feel they might be ordered to make financial payments to the other party as part of a divorce settlement. Or in some cases, the effects of the divorce itself might leave one party in an unenviable financial position in which they might (again, unwisely) consider to file for bankruptcy.
What I want to stress in this article is not so much the reasons for filing bankruptcy when it comes to divorce. Because while bankruptcy attorneys are quick to take your money and give you the false impression that bankruptcy is a walk in the park - the fact is that bankruptcy is in nowhere near as simple, cut and dry, and beneficial at all when it comes to sorting out the finances of a party involved in a divorce. In fact, there a great many Negative consequences - Highly negative consequences to filing for bankruptcy, whether a divorce is involved or not.
These include: the virtual destruction of the filer's credit record, the bankruptcy remaining on the filer's credit record for up to a full 10 years, the near impossibility of obtaining future credit during the time period, the inability rent an apartment, being required to pay deposits for future home utilities such as gas, electricity, water, internet, cable TV, etc. and the very real possibility of being passed over for a job, as more and more employers these days are performing credit checks as part of their routine job applicant screening process.
Chapter 7 Bankruptcy Alternatives
What you need to take with you today from this reading is the fact that bankruptcy is not the way to go. When it comes to being in a financially unstable position, there are in fact much better solutions to help one reduce and eliminate debt - without the need to even consider filing for bankruptcy. Chief among these programs is Debt Settlement. This programs involves a debt settlement firm negotiating on your behalf with your creditors to come to an agreement or settlement for a vastly reduced amount. This debt reduction is typically in the range of 50% and can be as high as 75% to 80%. Literally pennies on the dollar.
To learn more about debt settlement and other bankruptcy alternatives, please visit National Debt Relief Program at:
www.nationaldebtreliefprogram.org
Article Source: http://www.articlesbase.com/personal-finance-articles/bankruptcy-and-divorce-1267384.html
About the Author
Noted Financial Author
What divorce have to do with credit card debt?
A woman on a “credit card relief” commercial on the radio said “I contemplated bankruptcy and divorce …”
What does divorce have to do with credit card debt?
Wife Forged Name, Ran Up Debt, Filed Divorce. Bankruptcy Or?
My brother is a truck driver. Only home every other weekend. Wife out of the blue wants a divorce. He does a credit report and finds out she forged his name to several credit cards, ran up about 60K in debt, forged and cleaned out his life insurance policy, and also (she was filing seperately) had a 25K IRS tax lean against house. She’s didn’t file her taxes a year or two.
His divorce lawyer doesn’t seem too versed in bankruptcy law. Here’s the situation: Court ordered her to assume about $47,000 of the $60,000 in credit card debt. When house is sold, they both clear about $50K a piece. IRS gets about 30K of hers. Credit card companies are threatening garnishing his wages. She is “hiding” from them. If he charges her with credit fraud she’ll lose her nursing job (can’t have a felony as a nurse) and he’d get custody of the kid. He doesn’t want to do that but may have no choice. How can he get them off his back since she’s signed a court order saying she’s responsible? Bankruptcy? Etc
You read that wrong. His wife signed a court order assuming like $47K of the $60K debt. Her lawyer told her she better buckle or else she might face the credit fraud charges by my brother, lose her job and custody of the kid.
But, she is hiding from the credit card companies and so they keep coming after my brother. Heck, she had hidden PO boxes for her mail, and even her credit report lists her job address at a business that she doesn’t work for. Like I said, he’s a nurse, but somehow she’s fixed it so nobody can find her, at home or work. We don’t even know where she’s living now or what hospital she works at.
His lawyer doesn’t seem to know what he’s doing. Well, the divorce worked in his favor but where to go from here? How does he get these credit card companies off his back? The court order even says that she’s not allowed to file for bankruptcy as a way out so the credit card companies can go after him. And if she does quit her job or file bankruptcy, what does he do then?
Sorry, meant “She’s a nurse”, not “He”.
Can personal bankruptcy wipe out obligation to pay my ex-wife’s credit card debt based on a NH divorce decree?
there were no children. there are no child support issues, no alimony was awarded.
I am forced to file bankruptcy since my divorce due to a high debt to income ratio.?
My bankruptcy lawyer told me I am definitely eligible to file and we have started the process. I just wanted to know what happens to all that credit card debt, that is what I filed on. I did not want to ask the lawyer because maybe it is a stupid question.
Is my ex-husband still responsble for half of our debt from our divorce if he filed bankruptcy?
The debt we owe on is in the state of Texas. They said that they received his bankruptcy paperwork and in the state of Texas they can do nothing for me. However, we both live in the state of Ohio now. Can I take him to court in Ohio and win? I’m just trying to see if I can get some insite before I go wasting money on a lawyer if I can’t win.
The debt is a loan that we shared after we got married.
Everything changed when I got to your last sentence. He signed a court order assuming all responsibility…now he has to pay.
This is the most important part of bankruptcy for you. It is important that you understand it before deciding to move forward. Discharge (forgiveness) of credit card debt occurs differently depending on the type of chapter you are filing. Chapter 7 bankruptcy is the most common and petitioners receive a discharge of their unsecured debt (including credit card debt) in about 4-5 months. There are also asset limitations so if you have too much valuable personal property or equity in your home, you may be forced to turn that property over to the trustee. Ask you attorney about whether your personal and real property will completely be exempted. Under a Chapter 13 plan, unsecured creditors are paid according to a Chapter 13 plan your attorney will prepare after filing. Depending on your circumstances, these creditors will be paid for a 3 or 5 year period after which you will obtain a discharge. For more information on exemptions, check out the link below. You can also learn more about Chapter 13 and Chapter 7 bankruptcy below. I wish you the best of luck.
You are stuck, you cannot take him to court in Ohio to get a ruling reversed from a court in Texas.
That is to say No judge in Ohio will even hear your case since he would not have jurisdiction in the matter.
You might also like to know that Filing Bankruptcy is a “Federal” procedure, heard by a Federal Bankruptcy Judge” where as divorce judges are only State judges.
Furthermore, Bankruptcy filed after a divorce has been finalized may have three areas of impact. First, collection of any past due support may be halted pending the resolution of the bankruptcy. Second, a yet-unpaid property settlement obligation could potentially be discharged in the bankruptcy. And third, a joint debt assumed by the debtor-party could be discharged as to the debtor but not as to the co-signing ex-spouse who believed he or she was relieved of the necessity to pay the debt by order of the divorce court.
Each of these situations could cause significant hardship on the non-filing ex-spouse and should be discussed with a bankruptcy and/or family law attorney.
Your husband took you to the cleaners so to speak.
It can in some states, my neighbor just did it, his wife ran up credit card bills in excess of 56K in less than 9 months at the casino, they are divorced now for the past year or so and since she never worked he got 75% of the debt and all the cards were in her name not his, he just wiped out every last cent of it in bankruptcy court.
It depends. A wife could be responsible for her husband’s debt and vice versa. In some states spouses don’t have to worry about that. Their debt is their own, but in other states, the debt of one spouse is shared by both and both have to pay it back. If there is a house in the picture, then creditors will go after it. Perhaps that is why “she” mentioned divorce. Good luck and God Bless!