New Jersey Divorce and Bankruptcy Information
Conflict over finances and debt is a major contributor to divorce. Whether you are considering divorce and bankruptcy, going through a divorce and want to seek bankruptcy protection, or you are divorced and now need to file for bankruptcy, knowing how bankruptcy and divorce play off one another can help you make good decisions and protect your right to a sound financial future.
Questions about Bankruptcy and Divorce
- What’s the impact of filing for bankruptcy first and then for divorce?
- What happens if I file for bankruptcy during divorce proceedings, but my spouse does not?
- What happens if I file for bankruptcy after divorce?
- Should my spouse and I file jointly for bankruptcy before the divorce or separately after the divorce?
Contact an Attorney with the Experience to Help
An attorney at the law firm of John Hargrave and Associates, in Barrington, New Jersey, can answer your questions about bankruptcy and divorce. We have been helping people resolve difficult debt problems since 1977. Call 856-547-6500, or e-mail us for a free initial consultation.
Timing of Bankruptcy in Divorce Is Critical
The timing of a Chapter 7 bankruptcy or a Chapter 13 bankruptcy is important. This is because after you are divorced, certain types of marital debt cannot be wiped out.
For example, in New Jersey, if you have a property settlement agreement that requires you to pay off a certain amount of marital debt, this debt may be difficult if not impossible to discharge in a Chapter 7 bankruptcy.
In a situation like this, it may be more financially feasible to seek bankruptcy protection before divorce, erase that debt, and then divorce. In this case you would truly get a fresh financial start.
At the same time, if you are in the middle of a divorce and have received a sizable asset as a result of your property settlement, this asset will be included in your bankruptcy petition. The asset may then impact whether you should file a Chapter 7 or Chapter 13 bankruptcy.
Truly, the question of when to file for bankruptcy protection needs to be thoroughly explored. A bankruptcy attorney can help you determine that timing and how to maximize your ability to get back on solid financial ground.
Child Support and Alimony After Bankruptcy
If you owe child support or alimony, you will not be able to discharge these debts in a bankruptcy after divorce. Domestic support orders are not dischargeable under the bankruptcy code. This means that child support and alimony must be paid.
The receiving spouse does not need to provide any claim to enforce the support order already in existence. While other creditors are blocked from seeking to collect their debts during a bankruptcy action by an automatic stay, this is not the case with child support or alimony in a Chapter 7
However, if a paying spouse racks up thousands of dollars in arrears, efforts to garnish past-due child support are for the most part stayed in a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, the past-due support will be folded into the repayment plan.
Joint Credit Card Debt When Only One Spouse Files for Bankruptcy
If only one spouse files for bankruptcy but there is joint credit card debt, the debt may be erased for the one spouse but not for the other. In fact, that debt may wholly transfer to the other spouse.
When you file for bankruptcy, creditors’ attempts to collect on debts you owe are frozen. This immediately stops foreclosure and ends creditor harassment.
Credit Ratings, Ex-Spouses and Bankruptcy
If your ex-spouse has filed for bankruptcy, your credit rating should not be impacted. Your debts should not show on his or her credit report, and his or hers should not show on yours. This is something that likely would have been resolved before or during the divorce.
You can have a good life after bankruptcy. We are here to help you achieve just that.
Consult an Experienced Debt-Relief Attorney about Bankruptcy and Divorce Options
If you are considering filing for bankruptcy and about to divorce, going through divorce or already divorced, the law firm of John Hargrave and Associates, in Barrington, New Jersey, can help you understand your options and make good decisions about your future.
Our goal is to help you get back on the path to financial freedom as quickly as possible.
Please call 856-547-6500 to schedule a free initial consultation with an experienced debt-relief attorney. You may also contact us online to schedule your appointment.
We are a debt-relief agency. We help people file for bankruptcy relief under the bankruptcy code.