Bankruptcy After Divorce
Your budget is most likely based upon the earnings of both spouses. Divorce can place you in the position of having to pay the regular living expenses on less than half of the money you need to pay those expenses. Divorce is one of the most common reasons for bankruptcy.
Couples facing divorce should consult with a bankruptcy lawyer before filing for divorce. It may be wise for the couple to file a joint bankruptcy which will eliminate most of the debts which, in the divorce, would have to be assigned for payment by one spouse or the other. However, when the judge in the divorce case orders a certain debt to be paid by a certain spouse, the Court’s order is not enforceable against the creditors. If the spouse whom the divorce court judge ordered to pay a debt fails to pay, then the creditor can enforce the debt against the other spouse. The divorce court judge cannot change the rights of the creditor who has the right to collect the debt from either one of the divorcing spouses.
A divorce decree may result in limiting the debts which can be discharged in bankruptcy. After the Court has ordered the division of the debts, which is enforceable between the spouses, a bankruptcy by one of the spouses cannot discharge those debts which are assigned to that debtor by the divorce court judge.