One of the most common reasons a person files bankruptcy is because he or she recently got divorced. The parties that previously shared two incomes for one house, one light bill, and one phone bill now have to pay for two houses, two light bills and two phone bills . . . with only one income. On top of it all, there is very little money left over for either party to pay its credit card debt with the increased living expenses.
The question then becomes – can you get rid of any or all of your debt if you get divorced?
Like everything else, it depends.
Divorce related debt can be classified as a domestic support obligation or a division of property. Let’s say you and your spouse jointly owed $10,000 on a visa card. The divorce judge ordered husband to pay it. Husband files bankruptcy. If husband files bankruptcy, he is not liable to the bank for the visa card debt. He may be liable to wife, however, if wife has to pay the debt. If the debt was classified as a domestic support obligation in the divorce decree , he couldn’t discharge the debt as to the wife. If it were not classified as domestic support obligation, he probably would not owe the wife anything if he filed a chapter 13 bankruptcy; however, he may owe the wife if he filed chapter 7.
Child support and alimony are almost always classified as domestic support obligations; therefore, you would not be able to discharge those debts whether you filed chapter 7 or chapter 13 bankruptcy.
Judge Delano recently made an interesting ruling concerning attorney fees awarded in a divorce case. In the case, the wife was awarded attorney fees in the divorce, and the trial judge classified the award of attorney fees as a domestic support obligation. Husband then filed divorce. Wife did not file a motion for relief from the automatic stay and enforced the judgment of attorney’s fees by garnishing husband’s wages. Judge Delano found that wife did not violate bankruptcy law because the award of attorney fees were classified as a domestic support obligation in the state court and were not subject to the automatic stay of the bankruptcy court.
If you are looking for a bankruptcy attorney in Cape Coral, call the Rothrock Law Firm at (239) 206-1948.