Bankruptcy And Divorce: Credit Cards
Any Orlando bankruptcy lawyer, or any bankruptcy lawyer for that matter, who has represented clients with financial problems for a decent amount of time will tell you that filing bankruptcy and filing for divorce go hand in hand. This is a sad truth, but a truth nonetheless.
The issue of divorce and bankruptcy is so common with my clients, and the two are linked so well, I will be publishing more articles on the matter. However, this article will be devoted to the effect of filing bankruptcy and filing for divorce has on an individual spouse and any credit card debts they may owe.
The most important thing to remember when discussing divorce and credit card debt, is that the only ones party to your divorce are you and your spouse. That is, a third party, like your and your spouse’s creditors, are NOT part of your divorce proceedings and consequently, are not obligated to abide by your marital settlement agreement.
It is normal for couples who are separating to specify which of them will be obligated to pay for each of the marital debts once the divorce is complete. To bind them to these terms, the spouses sign a marital settlement agreement. While the ex-spouses are bound by the terms of the agreement, the creditors in question depend solely on their credit card agreement, car loan, mortgage, etc. that each spouse signed when credit was given. To be honest, your creditors do not care how you distribute your debt obligations between you when you split up, they just want to be paid, and they are supported by law.
You see, in the end, no matter how you and your ex determine who is taking over which debt, if you each signed the credit agreement, you will each continue to be responsible for the debt.
If one ex-spouse subsequently winds up filing bankruptcy, then the liability for the debt for that spouse can be discharged. The other, non-bankruptcy filing spouse, remains liable for the debt. To eliminate that liability, the non-filing spouse can also file or settle the debt with the creditor if the creditor allows for that option (don’t hold your breath).
The legal issues surrounding Bankruptcy and Divorce are many and complicated. In the coming weeks and months I hope to touch on some of the more common issues my clients face when dealing with these two legal topics on my blog.
If you are considering filing bankruptcy, you probably have a few questions, please check out my FREE E-COURSE.