Bankruptcy and Divorce: What you need to know
Unfortunately when you are filing for divorce and bankruptcy becomes the only option out of mounting debt, you can face increased problems pertaining to the bankruptcy. In order to sort through the issues, we must first take a look at marriage dissolution in family court and what it means.
In Ohio, a division of all real and personal property must be presented to a judge with your separation paperwork. A proper property division will also include division of debt between parties. Taking responsibility for a debt is a serious and binding agreement in divorce. Going into negotiations for divorce thinking you will take on a debt with the intentions of discharging the debt afterward through bankruptcy can have serious consequences. If it is at all possible, it is important to speak with your bankruptcy attorney before finalizing the paperwork for divorce.
You must take into account, your creditors do not care how or who pays off the debt you and your former spouse incurred. Even if one or the other spouse decides to take on the debt during the divorce proceedings, creditors can still pursue both parties. After the divorce is finalized, you cannot force your spouse to pay debt. Since the divorce agreement acts as a judgement, the debt assumed by your spouse cannot be eliminated in your bankruptcy.
By filing for bankruptcy before a divorce, you may be able to escape possibility of becoming responsible for your spouse’s debt. Take note, your spouse may also know that he or she must file for bankruptcy prior to the divorce; in turn, releasing he or she from the liability of your shared debt. In this case it is possible that you could be stuck with the liability of debt due to your spouse’s prior filing.
It is extremely important to work with a divorce and a bankruptcy attorney in this situation. Getting advice before filing for divorce is in your best interest and can save you time, money, and a mountain of stress. Trust the experts at Chris Wesner Law Office, LLC., they can guide you through the bankruptcy process to ensure you don’t get stuck with your spouse’s debts. They can also help you decide which bankruptcy is best and to what exemptions you are entitled under Ohio law.
For more information, please contact us.