Clark & Washington

Divorce, Debt Division, and Filing for Bankruptcy

If you are going to file for a divorce and your finances are in shambles, you might already be thinking about bankruptcy in order to stabilize your financial future.

All assets and liabilities are divided during a divorce under the rule of equitable distribution. While this can often mean dividing both assets and liabilities in half, this is not always the case. When you know that you are going to file for bankruptcy soon after your divorce and the marriage is drowning in debt, it’s time figure out what debt can be discharged in a bankruptcy.

Credit Card Debt and Back Taxes

Any debt that is only assigned to you through your social security number becomes yours when a divorce occurs. If you hold credit cards with your ex, or you took out a loan together, the debt is jointly held. You can discharge credit card debt in a bankruptcy, but student loans and back income taxes can’t be written off in a bankruptcy. If you are trying to make your life more financially secure after a divorce by filing for bankruptcy, you will want to take responsibility for the debt that can be written off as much as possible without taking on debt you have to pay back.

When Income Disparities Exist

If you and your former spouse have big disparities in your income, the spouse that has a higher income will likely be assigned a higher amount of debt from the marriage. In the reverse, the spouse that makes less money often receives a higher percentage of the assets to offset some of the inequities. When you are the spouse that makes less money and you are looking at a bankruptcy after the divorce, it is important to look at the assets to determine what you will be able to keep. You might even consider filing for bankruptcy together so that any assets left from the marriage can be divided up fairly between the two parties.

GA Bankruptcy Attorney

For couples who are having financial trouble and looking to get a divorce, it can help to sit down and talk with a GA bankruptcy attorney about options. Whether bankruptcy is filed before, during or after a divorce will depend on the couple.

When you need a GA bankruptcy attorney, it’s time to call Clark & Washington at 770-629-9093 to see how we can help you get your life back on track financially.

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