Bankruptcy & Divorce: What To Expect if Your Ex-Spouse Files Bankruptcy

Can an ex-spouse’s bankruptcy still impact me after a divorce?

Yes, an ex-spouses bankruptcy can still impact you following a divorce. Bankruptcy following a divorce can impact you in a number of ways, but generally speaking it may either allow for your ex-spouse to make financially obligations as per court order easier or it may attempt to waive the payments owed – altering your rights to collect on certain payments. If ones ex-spouse does file for bankruptcy it can also be anticipated that the ex-spouse may be pursued for the debt despite previous court decree. Bankruptcy courts have the liberty at times to disregard labels of types of payments required by family courts and therefore either require the ex-spouse to pay financial obligations and or waive other property settlement debts despite court orders. If you have a specific question concerning an ex-spouses bankruptcy it is important to contact a bankruptcy attorney and one that may also specialize in family law if possible as family court documents will need to be reviewed to establish ability to pursue such debts. One could possibly avoid such complications if they do not waive their rights to specifically owed family support in exchange for promises or other types of family payments outside of those specifically listed as child support or alimony.

Chapter 7 v Chapter 13:

In order to establish if a clause in a divorce decree is obligated or can be waived as a property settlement debt is the first necessary step in evaluating whether or not a debt may be waived. By law particular debts such as alimony and child support may not be waived by law; however, if additional payments are agreed under court order to provide for such support then they may be waived as part of a property settlement under some areas of bankruptcy law. In chapter 7 property settlements are non-dischargeable, but in chapter 13 bankruptcy such debts may become dischargeable. A chapter 13 bankruptcy therefore has the ability to cause significant damage to an ex-spouse if it is determined by the bankruptcy court that the debt is related to a property settlement. There are special situations where a bankruptcy court may still hold property settlement debt as non-dischargeable. One example would be circumstance in which an individual waived their rights as an agreement to pay off debt- the debt could therefore not be discharged regardless of nature.

What to do if a chapter 13 bankruptcy filed by an ex-spouse is affecting you?

Again the first step in handling this case is to hire an experienced bankruptcy attorney. Secondly, the attorney will need to review all of the pertinent divorce decree documents. The determination of whether or not the debt can still be collected upon may come down to the wording of the final court order. Even in some instances where it is stated that the debt could not be discharged on the bankruptcy court may not be held liable for the waiver of debt due to the debts nature. In other words the determining factor really comes down to the specified nature of the debt. Lastly, you should seek an order from the bankruptcy court that distinguishes that family court obligations owed are non-dischargeable.

How long will I have to dispute a bankruptcy discharge of my ex-spouse?

The time given to dispute a discharge is relatively short and all creditors and collectors including ex-spouses should be notified following the initial filing for bankruptcy. If you are the individual filing for bankruptcy you will need to inform your legal counsel of any and all individuals including ex- spouses that may still collect on debt prior to filing the bankruptcy. If you have received notice of an ex-spouses bankruptcy then it should be provided within the notice the amount of time left to dispute the discharge of debt. If not specifically mentioned it should be anticipated that the debt may be disputed for discharge in thirty days or less. It is important to contact a bankruptcy attorney to immediately begin work on your case after receiving a bankruptcy notice to the creditor.