Many times bankruptcy and family law go together. Sometimes it is because one person can no longer afford the expenses that two people used to contribute to. Other times it is that one spouse has taken on a significant amount of debt in the divorce settlement. Bankruptcy offers a solution to these problems.
When a person files bankruptcy after a divorce is finalized, they can discharge most of the debt they have accumulated in the divorce. Barring an agreement between the parties in a divorce decree that one party will not discharge their debts in bankruptcy, a person can file for bankruptcy and eliminate all dischargeable debts. These debts typically include credit card bills that the couple shared that one spouse took in the divorce. If one spouse took possession of real estate but can no longer afford the payments with just one income, they can file for bankruptcy protection to avoid liability of any deficiency owed.
One kind of debt that is not dischargeable that comes up in family law situations is alimony or spousal support. Both alimony and spousal support are specifically listed as non-dischargeable by the bankruptcy code, so declaring bankruptcy on these debts will not discharge them. However, many times bankruptcy is the best option for someone who has accumulated a massive amount of debt after going through a divorce.
If you are facing increased financial pressure because of a divorce or reducing income from two earners to one, contact the Law Office of Zachary Bushatz, LLC at 937-331-8061 and set up a free consultation today.