My Ex is Filing Bankruptcy...

When an Ex-Spouse Chooses Bankruptcy…

First of all, this a topic where a few areas of the law can intersect so it is wise to meet with an attorney to discuss your situation in greater detail. Having said that, a basic understanding of how joint debt will be affected when your ex-spouse files for bankruptcy is important.

If you incurred credit card debt together or both personally guaranteed a mortgage, the bankruptcy filing will eliminate your ex-spouse’s obligation for the debt. Your legal responsibility will remain. In fact, as the non-filing ex-spouse, you will become solely responsible for the full amount of the joint debt and you’ll likely have the collection calls and letters to show for it.

Need an Example?

If you and your ex incurred $40,000 of credit card debt jointly, after your ex files bankruptcy you will be solely responsible for the balance. Creditors prefer joint debt because they have multiple avenues for collection in the event of a default. Filing bankruptcy wipes your ex-spouse’s financial slate clean, but your obligation remains the same. For this reason, many who find themselves carrying the entire burden of jointly incurred debt do sometimes consider a bankruptcy filing themselves.

The Example Above Only Applies to Joint Debts

Keep in mind that the above example applies only to joint debt. If an ex-spouse incurred debt in their own name, a bankruptcy will not have the effect of shifting that burden to you. If you are considering bankruptcy or are not sure whether you have incurred joint debt, consider meeting with a bankruptcy attorney.

For more information information on how divorce will affect your property, click here.

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