The termination of a marriage through a divorce can be an emotionally devastating event for the parties. Suddenly, a couple that managed to support a family on two incomes must face the financial challenges that come from splitting up with each spouse having to make do on one income.
Decisions made during the divorce can create complex issues later on if one of the parties decides to eliminate debt through a Chapter 7 or a Chapter 13 bankruptcy. For instance, if divorce negotiations result in one spouse assuming the obligation to pay a joint debt, the inclusion of that debt in a consumer bankruptcy proceeding later might result in it being discharged.
The problem is that the creditor may seek payment from the spouse who did not file a bankruptcy petition. The spouse being sued for the repayment of the debt might try to enforce the divorce agreement against the spouse who had taken on the joint obligation. A consultation with an attorney at [nap_names id=”FIRM-NAME-2″], Jr. & Associates might result in the filing of a Chapter 13 petition instead of a Chapter 7 to avoid problems stemming from the terms of the divorce agreement.
We are bankruptcy attorneys, so reviewing your debt relief options with us prior to finalization of your divorce may help you to avoid costly mistakes. There might be financial challenges such as a default in paying the mortgage on the marital home that might make it beneficial to have both spouses filing for bankruptcy during the divorce to prevent foreclosure by stopping collection efforts while the bankruptcy is pending.
At the Monmouth County law offices of [nap_names id=”FIRM-NAME-2″], Jr. & Associates, we put our knowledge of the bankruptcy laws to work to achieve debt relief on behalf of New Jersey couples contemplating or actually embroiled in a divorce.