Today-especially today, it is very common for a divorcing couple to have to somehow legally deal with joint debts.
There are an endless number of attorneys to represent each party in the divorce, but few who know anything about how to properly resolve the resulting bankruptcy..
There is Life after divorce….and there is as always the business end of life that can be best defined early in the divorce and more and more often it will include joint and or individual bankruptcy.
For those of you facing or involved in divorce today, I suggest you now become expert in bankruptcy law.
“Roughly equal numbers of men and women file bankruptcy, with a ratio of 48-to-52. Over the last few years, the gap has been shrinking.
Married individuals are making up an increasing portion of bankruptcies – more than 64 percent in 2010. That number includes married couples filing jointly.
In addition, 17 percent of debtors are single, 15 percent are divorced and 3 percent are widowed.”
We do see a significant number of clients go bankrupt after a divorce. Unfortunately, creditors in most situations can still go after the non-bankrupt spouse which often forces that spouse to also go bankrupt.
Thanks Lex for plugging the stats into it….Yep, it appears something folks need to consider carefully when they are contimplating divorce.
Federal Bankruptcy Code is one of the few Federal laws that also include State laws….Each state has their own bankruptcy laws but the cases are resolved in that states Federal Courts.
Community property states consider most all debts as community debts where if one spouse escapes via bankrupcy, the other spouse is forced to pay the debts, and like you stated that then causes bankruptcy for them both. Where if instead the divorcing couple can manage to really face the whole long term results of the divorce drama, they can easily file jointly before the divorce is final and usually double their exemptions.
But another funny thing about filing indivually is the filing spouse not only is no longer responsible for the debts, but any of their property exempted by the bankruptcy court is then protected from a lien for 10 years from any lower court order, which includes Louisiana District Courts that later decide property settlements…..Funny how often divorce attornys and even Civil Court Judges don’t know this!