Financial troubles and marital woes often go together unfortunately. The stress of financial problems can weaken an already troubled marriage and commonly when a marriage is falling apart some poor financial choices are made, leading to a crisis. Bankruptcy is one option to help you resolve your financial problems. A bankruptcy is a federal case that wipes out some of your debt and gives you a fresh financial start. It is important to understand the implications of bankruptcy on your divorce.
Bankruptcy fees are the same whether you file as an individual or as a couple, so if bankruptcy is in your future, it may make sense to file jointly before your divorce. This will also reduce the amount of debt that must be divided in your divorce, and reduce your divorce costs significantly. If you have a lot of assets you want to exempt from the bankruptcy, two separate filings can double your exemptions, but it is important to discuss this with your bankruptcy attorney to determine what will work best in your situation.
If you get a divorce then find that you need to file for bankruptcy, you need to know the rules about how bankruptcy impacts your divorce judgment. Child support cannot be forgiven or wiped out in bankruptcy, nor can back child support. Alimony is also not dischargeable in bankruptcy, so thinking that bankruptcy will take away all of your divorce-related obligations is untrue. The only exception to this rule is if your divorce judgment orders you to pay a third party on behalf of your spouse (for example a credit card company) and calls it alimony; in this case this type of debt is dischargeable in bankruptcy.
DeTorres & DeGeorge offers knowledgeable and compassionate representation in divorce cases in New Jersey. We serve the Princeton and Edison areas. Make an appointment today.