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What effect will bankruptcy have on your divorce obligations?

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What effect will bankruptcy have on your divorce obligations?

Divorce can be a financially devastating undertaking. Not only do you have to split your assets with your ex, but you may also incur substantial expenses both from your attorney and the court. Beyond that, you may have ongoing financial obligations in the form of child support or alimony.

People often have trouble adjusting to a new budget or standard of living after a divorce, which can lead to serious financial issues. If all of your divorce-related expenses leave you in a financially compromised position, filing for bankruptcy can seem like a good solution.

However, it’s important to understand the unique concerns that someone who has recently divorced will have when going through bankruptcy proceedings. You won’t be able to discharge all of your debt, and your discharge could still leave you at risk of legal action by your ex.

You won’t get to discharge many divorce-related debts

If you find yourself unable to pay the ordered amount of child support or alimony, also known as spousal support, seeking a modification as soon as possible is in your best interests. The courts usually will not retroactively reduce child support. In other words, you will have to pay that higher amount until the courts approve a change in your support level.

Even after they make that change, you will still have to pay the back-due amounts that reflect the higher support level. Bankruptcy will not allow you to discharge unpaid spousal or child support. Additionally, bankruptcy will not result in an automatic adjustment of your support levels. In fact, a reduction in your overall amount of debt may convince the courts that you can now more easily meet your support obligations.

If you discharged debt that you shared with your ex, they might take you to court

There are many ways that the courts split up marital debt in a divorce. Depending on how they do so, you may not benefit from discharging those outstanding credit card balances.

If both you and your ex are on the account and you secure a bankruptcy discharge, the creditors can come after your ex. Depending on the nature of the debt division, your ex can likely hold you responsible for any amount they have to pay to handle a debt the courts assigned to you as part of your divorce.