So you just found out that your ex-spouse has filed for bankruptcy. You might be asking yourself: “Will this affect me in any way? If so, how?” Unfortunately, yes, this bankruptcy would affect you because you might still be held liable for certain debts.
Take a look at the impact of filing bankruptcy during divorce below:
- You’ll still be held liable for debts that you cosigned with your ex. If your ex filed a chapter 7 bankruptcy and discharges let’s say, a credit card debt, the creditor might still require you to make payments, because only your ex’s debts were discharged.
- If you still co-own a property with your ex-spouse and it wasn’t exempted, the court might sell the property and then utilize your ex-spouse’s share of the proceeds for repaying creditors. This means that while you’ll be given your share of the proceeds from the property’s sale, you still lose the property.
- If your spouse files for chapter 13 following your divorce, your ex-spouse would be liable for all co-owned debts even if you were solely the one who incurred them. Take note however that creditors might go after you if your ex fails to repay them as part of his or her repayment plan.
- Once your ex-spouse files for bankruptcy, an “automatic stay” order would take effect immediately, which means that creditors would be banned from collecting money from your ex. However, your ex-spouse would still have to maintenance payments, including spousal support and child support, says a top divorce lawyer in Boulder.
It’s fairly common to see people filing for bankruptcy following a divorce since the financial burden and stress that usually come with getting a divorce might lead to people believing that it’s the only option out there. If this is the case with your ex-spouse, the ideal thing to do is do your homework and find out exactly how his or her filing would specifically impact your life. Every bankruptcy case different, however, so it’s best to ask an experienced lawyer for advice.