Some of my best friends have been bankrupt and some divorced. At least one has gone thru both. One went into an attorney’s office and said “I want a divorce and I want to declare bankruptcy.” The lawyer asked, “what does your wife think of this idea?” “I haven’t asked her.” That person has had three divorces which never cost him a dime and continues to have a great relationship with all of them. Following his first divorce, the former wife gave him an allowance of $1,500.00 per month. The second gave him a house to live in on her property in the country and we will wait to see about the 3rd wife.
Bankruptcy and divorce has become much more acceptable and almost expected in today’s culture. My wife and I have been married to each other for 50 years. It has been my pleasure.When post moderns hear this they look like a deer caught in the head lights. They look puzzled like ‘I have never heard of such a thing,’ or ‘they must surely be in the book of records.’ No, not a record, it just ran in my family. When we made a commitment, we meant it. If at times it was not all fun and games, we worked on it and resolved the problem. Someone once said, “we don’t believe in divorce, but murder is an option.”
If you believe that you and your partner are headed for divorce, and you both have a lot of debt between you, it might be a good idea to decide to file for bankruptcy before you begin to file for divorce. This will pave the way for the divorce to proceed much more easily because it will allow you to get rid of some of your debt and to clear the way for a clean break. If you can file for bankruptcy, then you can have a better idea of how to deal with the debts that do remain between the two of you. It will also mean that if your ex files for bankruptcy later on down the road, you can be protected because you are going to take care of your debts before the divorce.
The way it works is rather simple. When one or both of the spouses file for bankruptcy, all of the property that has been shared by both of them will become a part of the estate and will then be available to pay for the debts. This will also mean that you have been granted an automatic stay, which means that the creditors can’t hound you for money. Remember that this stay does not prevent you from getting spouse or child support from your ex. The next thing that will happen is that the bankruptcy court will decide what shared property is exempt from the bankruptcy, meaning that it cannot be sold in order to pay for your debts. Then, the divorce court can divide that property between you and your ex spouse.
If you are trying to negotiate property settlements, and also going through bankruptcy, you are going to be dealing with very complicated issues. Some of the debts that might be related to a property settlement might not be wiped out during the bankruptcy, so you will still need to pay them. However, these debts can be wiped out if you can show that you can’t pay the debt and still take care or yourself or your children, or that if you wipe out the debt it is going to be better for you than the harm that would be done to the people that you owe by not paying it. This means that if you think your spouse is going to consider filing for bankruptcy after the divorce is final, you need to make sure that your finances are squared away so that you aren’t going to be faced with any more debts.
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