What do you do if your ex wants to declare bankruptcy? First of all, it is important you understand that it is the Constitutional right of every individual in America to file for bankruptcy protection if they perceive the need. So whatever you do about an ex-spouse filing, you should legally respect their right to file and still protect yourself and your assets.
Any filing of bankruptcy by an ex-spouse can complicate asset issues. Even though you have a divorce decree saying who gets what from your divorce, there will still be legal implications that must be dealt with if your spouse files a bankruptcy. Any child and spousal support may be temporarily affected by a bankruptcy, and any unfinished business like the non-transferal of mortgage titles can create problems in bankruptcy for a spouse not filing.
Child and spousal support in bankruptcy.
Although child and alimony support cannot be discharged in bankruptcy cases unless undue hardship is proven, the automatic stay of bankruptcy can postpone these types of payments until the bankruptcy court can deal with them.
In a Chapter 7 bankruptcy, the simplest type of bankruptcy, a bankruptcy trustee will gather and sell your non-exempt property, and he will use the proceeds from the sale in order to pay your creditors. Child and spousal support, although placed as a first priority payment by the trustee, will not be paid unless and until liquidated funds are available for payment.
A Chapter 13 bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their unsecured debts over three or five years. Here, child and spousal support will be paid first by the trustee as soon as the plan is approved and the trustee collects the payments from the filing debtor.
Unfinished business and non-transferal of titles after divorce.
A spouse not getting a titled asset in a divorce decree but still having their name attached to the title can suddenly find there self being pursued by a collection department representing the lien on the loan for the titled asset. This can hurt your credit and can cost you money to undo the wrong.
If your Ex files a Chapter 7, he or she can potentially have their responsibility for any unsecured or secured debt discharged. As the surviving spouse on a secured title, you may be sued for any deficiencies not satisfied and be responsible for half of the tax obligations.
If your ex files a Chapter 13, you can be better protected as an ex-spouse on unfinished business, but there can still be complications that may require your legal attention.
What Do You Do if your Ex Wants to Declare Bankruptcy? You might want to hire a bankruptcy lawyer to help you understand how these complex laws may apply in your particular situation.
If you live in or around the metropolitan area of Nashville, Tennessee, contact us here today at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
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