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Can I file for bankruptcy during a divorce?

On Behalf of | Feb 22, 2021 | Uncategorized |

There is no rule that says a Washington resident who is planning or in the midst of divorce cannot file for a bankruptcy. However, there are some considerations people in the greater Seattle area should be aware of before taking this important step.

Divorce-related debts may not be dischargeable in bankruptcy

For instance, debts related to divorce may not be dischargeable in bankruptcy.

Child support and spousal maintenance generally cannot be discharged. Bankruptcy can, however, still help a person who is behind in these obligations by discharging other debts.

Other payments, including payments from one spouse to another as part of a property settlement, may be dischargeable in a bankruptcy. However, this is not always the case. The bankruptcy court will examine certain fact-specific questions to decide whether or not to let the spouse have a discharge from these debts.

There are other strategic considerations for filing bankruptcy during divorce

The spouses will also have to figure out how to manage the debts they owe to other people and businesses.

For example, if only one spouse files for bankruptcy, then most of the debts in her name, as well as her share of all joint debts held with her spouse, will be discharged.

However, the other spouse may still have to pay these debts if they are also in his name. He may have the option of asking the family law court to force to his spouse to pay her share of these debts as part of the divorce, even if she got a discharge.

One solution may be for spouses in financial trouble to agree to file a joint bankruptcy before getting a divorce, thus making the division of debts largely a moot point. Other options may be available and should be discussed with an experienced attorney.