Knowhow-Now Article

How To Deal With Your After Divorce Obligations

Life never runs out of challenges. This becomes evident when you go through financial difficulties and struggles in relationships, such as divorce. One of the major concerns that need to be addressed is knowing how to deal with after divorce obligations. Sometimes money is the root cause of the marital problems, other times it is the divorce process itself that results in financial obligations that are simply too difficult to sustain. It is therefore vital that you are armed with valuable information that will help you go through with this and give you a smooth transition. 

An important thing to remember is that marriage is a two way street and both of you are responsible for whatever outcome it presents in the future. Having a thorough understanding of all the possible alternatives you have before, during and after your divorce can prevent either one of you from being trapped into a financial crisis. 


Before The Divorce

Usually, your filing for bankruptcy is handled before you go on with the divorce proceeding. In this way, the both of you will be able to decide how you can divide your assets in an equitable manner, which will be beneficial for you both. During this time, you will have to decide the debt burden each of you will have to take responsibility on. 

Even if you are already separated but are still married, both husband and wife are allowed to file a petition for joint bankruptcy. This can be done if both parties are willing to work together and come up with an amicable decision with the help of their attorney. There is great advantage of settling this before the divorce proceeding actually takes place because you have one thing less to worry about since your marital debt has already been settled.


During Divorce

Divorce in itself is a very difficult situation to be in but you have no choice but to deal with the bankruptcy process for the divorce to push through. 

Knowing when to file for bankruptcy in a divorce proceeding highly depends on the amount of debt each party carries in his or her name. These may include cars, financial accounts, houses and other assets that are titled in whose name during the marriage. As much as possible, equal sharing of the financial burden must be done. There are some instances though that one spouse is discharged of financial obligations while the other is saddled with the remaining debts. This definitely not how one must deal with after divorce obligations. 

The moment a spouse files for bankruptcy, an automatic stay will be issued by the bankruptcy court. In this way, creditors will be unable to collect the outstanding debts that still need to be paid further. This also makes it impossible for the divorce court to move forward. In the same manner, the divorce court cannot divide the assets between the spouses without first determining which among the property can be exempted from the bankruptcy. This is decided by the bankruptcy court. You also have to remember that you cannot use the exempt property in order to pay off your remaining debts. 


After Divorce

In some cases spouses choose bankruptcy filing after the divorce so they can get rid of the debts that they were required to settle as mandated by the divorce order. Take note however, that there are debts that cannot be dischargeable in Chapters 7 or 13 filing. Mostly this has to do with your support obligations to your children or your alimony. Therefore, you have no choice but to pay. 

If you are concerned that your spouse will file for bankruptcy after the divorce proceeding is over, you can protect yourself by including indemnity agreements, support obligations, and property liens. 

Divorce is a tough period spouses go through, but you can lighten the load if you know how to deal with after divorce obligations efficiently. It is best that you and your spouse deal with this responsibly so both of you gain equal benefits. 


Post Divorce Obligations - Further Reading

Post Divorce FAQs

Jewish Divorce Obligations

How To Protect Your FInances After Divorce

Financial Obligations During Separation

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