The Law Offices of John J. Finckbeiner Jr.
Call Us for a Consultation

Be careful about taking debt back after bankruptcy and divorce

Did you know that you can use bankruptcy to remove your liability for certain debts, but, if you then file for divorce, you can take that debt back on? This is easy to avoid if you're watching for it, so you don't want to make any mistakes that would immediately put you back in debt after the split.

For instance, maybe you and your spouse opened a credit card account jointly. You owe $20,000 on the card. Before filing for divorce, you decide to proceed with the bankruptcy filing because you need to simplify your financial situation and make life more affordable after the two of you split up and your income is slashed in half.

The bankruptcy filing goes through. You used Chapter 7, so you are no longer liable for the debt. Your credit takes a hit, but you feel free of that burden.

Then you go to divorce court. As part of the agreement, when splitting up property, your spouse wants you to agree to pay off some of what is still owed on that card. If you agree to it -- perhaps so that your spouse will agree to give you some assets that you specifically want during the property division process -- then you're liable for that debt all over again. It doesn't matter that you filed for bankruptcy already. The amount you agree to pay, you have to pay.

Finances can get complicated during a divorce. Slow down, take your time, and really think through everything you agree to in court. Know your options and understand the legal ramifications behind every step in the process.

Source: Bankrate, "Which to file first: Divorce or bankruptcy?," Justin Harelik, accessed Jan. 19, 2017

No Comments

Leave a comment
Comment Information

Free Initial Consultation

Call 504-662-1754 to contact either of our two convenient locations in New Orleans or Chalmette for quick, prompt and courteous legal services. Initial consultations are always free because we believe that everyone in Louisiana should have the opportunity to learn more about his or her rights. We are available Monday through Friday during regular business hours, and by appointment on weekends.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Review Us

Chalmette Office
Chalmette Office
2203 Pakenham Drive
Chalmette, LA 70043

Phone: 504-662-1754
Fax: 504-279-5375
Map & Directions

New Orleans Office
French Quarter Office
327 Exchange Place
New Orleans, LA 70130

Phone: 504-569-0277
Fax: 504-569-0278
Map & Directions