What Do You File If Ex Spouse Files Bankruptcy And He Owes You Money

Divorce and Bankruptcy: What You Need to Know if Your Ex-Spouse Files for Bankruptcy

By
January 2, 2015
75,831 Views
76 Comments

Going through a divorce can exist emotionally and financially painful. And if your ex-spouse files for bankruptcy, it may become an even greater stress because information technology can negatively affect your fiscal stability. Divorce and bankruptcy can take an impact on your financial state of affairs in different ways, depending on your ex-spouse'southward new circumstances.

Bankruptcy allows debtors (individuals or businesses) who owe creditors more money than they can beget to pay to manage their debt in an orderly style through court intervention. Private debtors tin can file for bankruptcy under Chapter xiii or Chapter vii of the Bankruptcy Lawmaking. The U.S. Courts website explains that Chapter thirteen bankruptcy is a repayment plan of debts over a menses and that Affiliate 7 defalcation eliminates—or discharges—most or all of the bills. Once the debtor files for bankruptcy, creditors are ordered to stop all collection activity, which is called an automated stay.

Hither are 3 things to consider when going through a divorce and bankruptcy, including what you should do to protect yourself and your financial stability.

Alimony and Kid Support

Closeup of hundred dollar bills with Child Support note

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, pension and child support payments must be paid earlier all other creditors, including taxes. Fifty-fifty though alimony is non dischargeable, this doesn't mean yous volition continue to receive the same amount you did before your ex filed for bankruptcy. In most states, alimony obligations tin be modified if the ex-spouse submits a request to the bankruptcy court. The bankruptcy court may determine a new corporeality or establish an agreement with you based on your ex-spouse's petition.

There are some rare circumstances in which alimony tin can be discharged, and then be safe and contact your divorce lawyer to ensure your alimony or support payments are protected.

Your Credit Study

Good Credit Score

Your credit may not be directly affected past your ex-spouse's bankruptcy filing because your credit score is separate and distinct from your ex-spouse. All the same, if your ex-spouse was discharged from the obligation of a joint-owned or cosigned debt, the creditor has the right to need payment from you. If you don't pay the debt, then your credit could be negatively affected.

In rare cases, the creditor may inadvertently notate the filed bankruptcy on the non-filing spouse's credit written report. If the bankruptcy notation is on your credit report, dispute the notation with the credit reporting agencies, Trans Spousal relationship, Equifax, and Experian. If your ex-spouse files for bankruptcy, it is recommended that you review your credit study for errors six to nine months later they filed.

Articulation or Cosigned Credit Obligations

If your ex-spouse files for bankruptcy, yous will be responsible for the debt if you are a joint owner or cosigner. The lender can require y'all, as a articulation owner or cosigner, to make payments on a loan if your ex-spouse declares bankruptcy on the credit.

"Unfortunately, the creditors don't care what your divorce agreement stated," says Justin Harelik of Bankrate.com. "You are still responsible to pay on this debt even if your [ex-spouse] fails to pay. The divorce understanding does not wipe out your responsibility to pay, merely that yous can strength another person to practice so."

Be prepared to pay the loan in the event that your ex-spouse stops paying or is discharged from the obligation to pay the debt through bankruptcy. Contact your divorce chaser to discuss your legal options.

Addressing these things will assistance you lot be proactive in protecting your financial stability.

If your personal finances are suffering due to your divorce, you don't take to struggle solitary. We tin can connect you with a Bankruptcy Chaser in your surface area to provide a free consultation.

Bankruptcy certificates are required for your debts to exist discharged past defalcation. We provide pre-filing credit counseling, too as mail service-filing debtor education to assist you lot in the process.