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Bankruptcy & Estate Planning Help For Everyday People

What happens to your debt if your ex-spouse files for bankruptcy?

During a divorce, the North Carolina family courts determine a reasonable and fair way to split up both the assets you've acquired during your marriage and the debt you share as a family. Many times, the spouse who has greater overall assets or income will wind up responsible for a greater share of the debt from the marriage as well.

Still, while the courts may have ordered your ex to pay, that doesn't mean you have completely washed your hands of your financial obligations unless your ex refinances that debt as part of the divorce. In some cases, you could still wind up obligated to pay those debts or face the potential impact of non-payment on your credit.

You may feel comfortable financially after a divorce knowing that your ex will be the one to handle your major outstanding credit card bills. However, if your ex files for bankruptcy after the divorce, you could find yourself facing financial hardship in the near future.

Can creditors come after you for the debt?

The biggest concern for most people who find out their ex has filed bankruptcy is whether there will be direct financial repercussions for them from the bankruptcy. That will depend on the nature of the debt and how your ex holds it.

For example, if you shared credit card accounts, you may have closed the account for repayments, meaning that there are no new expenses added to the balance. However, the debt currently on the account, even though your ex has a court order to pay it, is in both of your names. In the event that your ex secures a discharge, you may wind up on the hook for repaying the total balance of those cards without assistance.

The court order issued in your divorce does not bind the banks, only you and your ex. That means that you can probably secure an additional court judgment against them for the violation of the terms of your divorce, but in the meantime, you'll have to deal with the financial and credit hardship that may result from the filing. Unless your ex refinances the debt into their name only, you could wind up forced to pay.

Can your ex discharge child support or spousal support?

In the event that you don't have substantial debt shared with your ex, you may hold some of the debt that they currently owe. Past-due child support and spousal maintenance can strain someone's finances and leave them feeling desperate for relief.

However, you depend on that child support or spousal maintenance to pay your bills and make ends meet. It is perfectly natural to worry that your ex will somehow avoid their obligation to you and your children through bankruptcy proceedings. Others may need to file because of the financial impact of the divorce.

The good news is that bankruptcy does not impact child support or spousal support. Your ex cannot discharge past due amounts or use bankruptcy to change child support. They can only do that by requesting a modification from the courts.

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