Sometimes, divorce and bankruptcy go hand in hand. If this is the case, you need to understand your financial situation. You can learn more here.

Bankruptcy and Divorce

If you have been awarded a support order, be it child support or alimony, one common question which frequently arises is “What happens if my ex-spouse filed for bankruptcy?” Debts owed for domestic support obligations, such as child support and alimony, are debts, and are included in bankruptcy cases. Other included payments are joint debts, attorney’s fees and costs someone is ordered to pay in a divorce decree.

Payees include a child’s parent, guardian, your child or your ex-spouse. Your duty to pay support survives bankruptcy. You can’t receive a discharge from domestic support obligation debts in most bankruptcy cases. Discharge means the end of the duty to pay a debt, and it’s the center focus of a bankruptcy case. Some debt types are cannot be discharged, including domestic support obligations.

Think of it this way – a judge entered an order telling you to make a payment or payments. Now another judge has to decide if you should still have to make these payments. If you could discharge these debts in bankruptcy court, everyone would want to file bankruptcy. Then, that would frustrate the purpose of the support order. The order is meant to compensate or care for a person for whom you have a financial responsibility. It does not matter whether or not a debt for support was incurred before or during a bankruptcy case.


Persons who have property settlement obligations that may arise from a divorce, such as the sale of the marital home to resolve financial arrangements are also covered, and if the bankrupt party has to sell their interest in the property they don’t damage the potential of the non-bankrupt party. Bankruptcy law covers these debts types, too.

Discharge for a property settlement debt depends on the type of bankruptcy case. You should speak with a bankruptcy lawyer if you have specific questions

Bankruptcy and divorce are both stressful and life-changing events, and when combined they can leave you feeling helpless. However, sometimes these choices are the best options to make.

Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy is designed for someone who is buried in debt to get relief. For many people, it is an extremely economical and easy way to get relief from debt. Another form of bankruptcy to consider is Chapter 13 bankruptcy. This gives you a chance to pay back what you can afford. There are many advantages to filing for bankruptcy before divorce, as well as for filing after. Knowing all of your options will help you to make an informed decision. Also, it will give the quickest opportunity to start fresh. Bankruptcy under Chapter 7 works by sending your assets to the bankruptcy estate. These assets are then liquidated in order to pay off your debts. However, you have a chance to exempt many assets under certain laws. So, in this way you will be able to retain many of your assets.

Chapter 13 Bankruptcy

Another form of bankruptcy that you can file for is Chapter 13 bankruptcy. This form of bankruptcy allows you to make a plan stating what you can afford to pay. This happens regardless of what you owe you will only have to pay what you proposed in your plan. You do not have to liquidate your assets while still giving you a chance to control your finances. You can talk to an attorney and they can help you explore this option and see if filing for bankruptcy under Chapter 7 or Chapter 13 is possible for you.

Joint Bankruptcy

Filing for joint bankruptcy with a spouse, even if a divorce is imminent, could be a good decision. Joint bankruptcy can save money and reduce liability for debt. If you choose to file for bankruptcy before your divorce, you will have the option of dividing the debt between you, which will ensure that one spouse does not get stuck with all of the debt. You may want to file for bankruptcy apart from your spouse if your spouse brought debts into the marriage because this means that after the divorce you will not be responsible for paying back the debt.

You may want to wait until the divorce is finalized before filing for bankruptcy because both spouses’ income will be taken into consideration and this may disqualify you for bankruptcy. There is a lot to reflect on when considering both divorce and bankruptcy. Many factors will go into how you choose to file for bankruptcy, including how well you get along with your spouse, whose responsibility the debt is, and at what point you qualify. Regardless, filing for bankruptcy can be the first step towards a fresh start. Discussing your options with an attorney can help you make the best decision for everyone.

Bankruptcy After Divorce

Bankruptcy may be a safe option once you are divorced if you find you cannot afford living on a single income. If you will be taking the bulk of the debt once you separate and do not have the income to support it, you may consider filing for bankruptcy and starting over all together once the divorce is finalized. Here are some topics that often arise from divorce when contemplating a bankruptcy or may lead you to file for bankruptcy after your divorce.

Question One

Who will take the marital home and pay its related expenses? If you are getting a divorce and taking over possession of the marital home, along with taking over the related expenses, especially the mortgage(s) on the home, be sure to have your divorce decree state the terms of this transfer accurately. Also, making a budget before the divorce is final will help you determine if you will be able to afford to stay in the home. If it is determined that you can, in fact, afford to live in the home after the divorce, then make sure the proper documents are recorded on the land records after the transfer. This will give you a paper trail you may need to provide in your bankruptcy case later on.

Question Two

Will you be responsible for credit cards in your ex-spouse’s name? If so, make sure the divorce decree/separation agreement spells out all debt you will be taking responsibility for once the divorce is final, along with the last four digits of any account numbers. Once the divorce is final, be sure to contact each company in writing and have the accounts switched into your name. Wait at least six weeks and then review your credit report(s) to ensure accurate reporting, so as not to inadvertently leave off a debt you are responsible for on your bankruptcy petition, among other things.

Question Three

Will you be ordered to pay alimony or child support? Keep in mind, that these particular types of “debts” are allowable deductible expenses in your bankruptcy case; this means that they are taken into consideration when qualifying for bankruptcy. Also, it is important to note that court-ordered alimony and child support are what is known in the bankruptcy realm as “priority debts” and cannot be discharged in most cases. Taxes and loans involving the government are also included in the priority category. It is vitally important to have all obligations in this category fully defined and explained in your divorce decree/separation agreement, as you will likely be fulfilling these obligations regardless of ever filing for bankruptcy.