Most divorces are surrounded by drama and during this time many mistakes can be made. It is important that you understand the correlation between divorce and bankruptcy, how to manage your secured debts and unsecured debts and how to stay protected from your spouse’s debts.
Divorce and Bankruptcy: How the Process Works
The one financial issue that couples face when going through a divorce is unsecured debts. For all debts that were created during the marriage, both names will be listed as owing the debts. As a result, you are still liable for the debt even if you had no knowledge of the debt. Examples of unsecured debts are:
- Credit card bills
- Hospital bills
- Utility bills
Credit card companies and other creditors only care about the agreement that was made prior to the divorce. So, if you want to know what your options are, speak with an experienced bankruptcy attorney.
How to Protect Yourself from Secured Debt
Fortunately, there are several things that you can do to improve your financial situation. One of your options is filing for bankruptcy. However, if you choose to file bankruptcy, you should look for any joint open accounts that may have your name on it. If your spouse has any open credit card accounts and doesn’t pay the bill that will have an affect on you as well.
Especially relevant, you can find these accounts by obtaining a copy of your credit report. The report will help you see which accounts have both of your names on them. All credit reports show open accounts and joint accounts.
If money is owed on certain accounts, and you are dealing with the financial aspect of your divorce, you or your spouse will want to pay these accounts off. Paying these accounts late or not paying them off at all will affect your credit score. This means that you will have a more difficult time getting new credit cards or loans.
The best way to proceed with divorce and bankruptcy is to contact a bankruptcy lawyer that has experience in this area. It does not matter who opened the accounts, both of you will still owe the money. Bankruptcy may be the best way to have the debt discharged or make it manageable for you to repay.
You can recover financially from divorce and bankruptcy. Schedule a free consultation with the experienced attorneys at Douglas Jacobson Law Firm.