The North Carolina Bankruptcy Information Blog

For many people, divorce can cause a huge financial strain in already tough economic times. In others cases, it’s the crushing weight of debt that leads to the dissolution of a marriage.  Whatever the ultimate cause, and effects, when considering bankruptcy amid a divorce it’s important to know a few basics.

Divorce Decrees and Bankruptcies
Because your bankruptcy only includes debts in existence at the time of your bankruptcy filing, a subsequent divorce decree (i.e., a divorce decree following the date of your bankruptcy petition) remains intact and won’t be included in the debt dispensed by your bankruptcy. While few attorneys would urge you to continue in a bad relationship for money, some good advice might be to time your bankruptcy filing so that it follows (and includes) the divorce decree or separation agreement.  Keep in mind that only Chapter 13 bankruptcy discharges debts and equitable distribution obligations, as long as they are not considered alimony or child support or in lieu of either kind of domestic support.  Sometimes, obligations to pay the other spouse’s attorney fees related to the separation or divorce might sometimes be considered domestic support obligations and therefore non-dischargeable. 

All obligations under a separation agreement remain intact and enforceable after a Chapter 7 bankruptcy, as Chapter 7 does not afford the debtor a discharge of any separation or divorce-related obligations.…

This unrelenting economic downturn has been rough on all Americans—whether they be single, dating, engaged, married or widowed. But, as anyone who has ever been married already knows: money can be the main cause of many a marriage’s marital strife. As a result, in this especially difficult economic climate—full of job insecurity, rising mortgage costs, health care uncertainties and other mounting money woes—times have never been tougher for couples pushed to the brink of bankruptcy.  Many are left to wonder, who or what can help?

Yet, no matter how tough the economic tide, laying blame to your spouse for your family’s financial problems can be a dead end road that often leads to, at best, long-term distrust, and, at worst, the dissolution of the entire marriage.…