Bankruptcy after a Divorce: Getting Your Finances under Control

If you and your former spouse left the marriage with a lot of debt, you may need to file for bankruptcy after your divorce is final. Depending on the amount of debt you are now responsible for and the type of debt it is, filing for bankruptcy may help you get your financial life back under control. How the debt was split in your divorce can also have an impact on your ability to pay the debt back. If you live in an equitable distribution state, the debt will be divided as to what is fair for both parties. If your state is a community property state, you will be responsible for half of the debt from your marriage.

Debt You Can't Get Rid of in Bankruptcy

When there are back taxes from your marriage that haven't been paid, both of you will be responsible to the government for paying back this debt. Even if your divorce decree states that your ex has to pay back the income tax debt, you are still liable for that debt until it is paid off. This means that if your ex doesn't follow through with paying off the income tax, you may find yourself having a refund taken to pay for these back taxes. While you can file with the probate court for contempt of the order, this will take you time and money to accomplish.

You also can't discharge student loans in a bankruptcy unless you can prove undue hardship. The undue hardship threshold is pretty hard to meet, as you must be able to show that you are living a minimal standard of living, that your wages will not increase, and that paying your student loans will decrease your minimum standard of living even further. If you are disabled, it's important to contact the Department of Education to see if you qualify for any programs to get rid of your student debt.

If you owe any back child support, it will not get erased by filing for bankruptcy.

Unsecured Debt that Goes Away After Filing for Bankruptcy

Old electric bills, cable bills, and credit card bills you've racked up for years can all be wiped away by filing for bankruptcy. If you owned a car that is now repossessed and you don't want it back, the car loan can also be part of your bankruptcy.

When you are ready to get out from a mountain of debt after a divorce, it's time to work with an attorney like Biales Delchin Law LLC. who can help.


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