If you are divorced and your ex-spouse decides to file a personal bankruptcy, you may be wondering how it will affect you, especially if your divorce decree provides that your ex is liable to pay the majority of your marital debt. Will the creditors start pursuing you to collect on the debt?
When your ex-spouse files for bankruptcy, the automatic stay will immediately protect him/her from further collection efforts by creditors. Additionally, he/she will likely be allowed to discharge the majority of his/her debt, even though your ex agrees to pay this debt in your divorce agreement! As a result, to the extent you are still liable on your marital debt (your name is still on the loan documents or credit agreement), you remain accountable for paying them. It is important to note that whether or not your state is a community property state is also factor that can impact how your ex-spouse’s bankruptcy affects you.
What about the divorce decree? Your divorce agreement is a contract between you and your ex-spouse. As a result, creditors are not bound by the terms of the decree (unless the creditor agreed to modify the loan and remove you from the contract). This means that what was jointly owed before the divorce can still be owed by both you and your ex-spouse after the divorce.
What can you do? If you discover that your ex is planning to file a personal bankruptcy and you have a lot of joint debt, you may want to consider filing your own bankruptcy. A skilled bankruptcy attorney at DeLadurantey Law Office, LLC can review your individual circumstances and help determine if filing a bankruptcy case is the best option for you.
If you would like a down-to-earth approach and a lawyer who will listen carefully to all your questions and concern, call DeLadurantey Law Office, LLC,at (414) 377-0518. We serve clients primarily in the areas of Chapter 7 and Chapter 13 bankruptcies, debt negotiations and defending foreclosure actions. If you live in the area of Milwaukee, Wisconsin, call us for the debt relief assistance you need. Visit our web site and like us on Facebook.