What Happens When Your Ex Files Bankruptcy?

Get Control of your DebtGetting divorced can be expensive.  First you have to get an attorney and then there are court costs, depositions, experts, and other expenses.  When it is all finished you may have child support, alimony, or spousal support as well.

Don’t be surprised if soon after the divorce decree is signed you get a letter in the mail notifying you that your ex has filed bankruptcy.  It is not uncommon for the recently divorced to file bankruptcy to discharge their remaining family lawyer’s fees and to clean up old debt.  Unfortunately your ex’s bankruptcy filing can affect you as well.

If your divorce isn’t finalized yet then filing bankruptcy will stay the proceeding.  Hopefully you are not in a hurry to complete the divorce, because you will have to go to the bankruptcy court first in order to lift the automatic stay.  This process will usually take about a month, and during that time nothing will usually happen in the divorce case.

If you share liability for a debt with your ex, then you are both joint and severally liable for the debt.  That means that the creditor can collect the entire amount from either one of you.  Divorce decrees often address liability for debt incurred while married.  If you share liability for a debt with your ex, then the divorce decree can designate who will pay the debt.  However, the decree is like a contract between you and your ex.  The creditor is not bound by the divorce decree.  After filing bankruptcy your ex will probably stop paying those credit cards she was required to pay in the decree.  The creditors will then collect from you.  In order to get relief from your ex for violating the terms of the divorce decree you will have to take her back to the family court.

Nathan