After representing clients and filing bankruptcies for a good while, any Orlando bankruptcy lawyer, can share with you a sad truth: Filing bankruptcy and filing for divorce often go hand in hand. Bankruptcy lawyers help many individuals going through a divorce deal with their financial difficulties.
The issue of divorce and bankruptcy is so common with my clients, and the two are linked so well, I will be publishing more articles on the matter. However, this article will be devoted to the effect of filing bankruptcy and filing for divorce has on an individual spouse and any credit card debts they may owe.
What you need to keep in mind while addressing divorce and creditors, is that your spouse’s credit card companies, and your own are third parties to your divorce proceedings. In other words, you and your spouse are the only ones party to your divorce and therefore the only ones bound by the marital settlement agreement.
When separating, it is common for people to assign which debts each spouse will be responsible for after the divorce is finalized. These terms are often memorialized in a marital settlement agreement. This agreement legally binds the parities seeking the split-up to the terms included in the agreement. However, each spouse’s creditors rely on the credit card agreement, the car loan, the house loan, etc., that each spouse signed with the creditor at the time the credit was issued. Frankly, creditors could not care less how you decide to divide the debts between the two of you when you part, and the law is on their side.
You see, in the end, no matter how you and your ex determine who is taking over which debt, if you each signed the credit agreement, you will each continue to be responsible for the debt.
If one ex-spouse subsequently winds up filing bankruptcy, then the liability for the debt for that spouse can be discharged. The other, non-bankruptcy filing spouse, remains liable for the debt. To eliminate that liability, the non-filing spouse can also file or settle the debt with the creditor if the creditor allows for that option (don’t hold your breath).
The legal issues surrounding Bankruptcy and Divorce are many and complicated. In the coming weeks and months I hope to touch on some of the more common issues my clients face when dealing with these two legal topics on my blog.
If you are considering filing bankruptcy, you probably have a few questions, please check out my FREE E-COURSE.