Bankruptcy and Divorce

Bankruptcy and Divorce

Unfortunately, it is very common for a person to need to file bankruptcy after a divorce. There are certain debts that you cannot discharge however, and you should know the rules and laws regarding debt you took on in your Marital Settlement Agreement or via a Court Judgment after a trial.

If you want to file a chapter 7 (where you discharge all of your debt) there is a bar against discharging attorney fees and/or other debts you are required to pay pursuant to your dissolution action.    However, under code 523(a)(15) claims and the related attorney’s fees are dischargeable in a chapter 13 case, as long as the debtor makes all plan payments and receives a discharge. If the debtor does not make the payments and get the discharge, the debtor will still owe the money. Depending on the amount of debt that is involved, even if the debtor qualifies for a chapter 7, a chapter 13 may be a better option to get rid of that extra debt.

For more information on bankruptcy (chapter 7, chapter 13, – individual, join or corporate) you should contact an attorney to make certain you get the most relief out of your bankruptcy matter.

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