How Divorce Affects Bankruptcy


Dealing with financial problems can be stressful enough without having to worry about other complications. That’s why anyone who is struggling with mounting debts while also going through a divorce really needs to have the assistance of a qualified bankruptcy and debt management lawyer. The truth is that divorce and bankruptcy often go hand in hand, with the negative financial implications of a divorce resulting in the spouses also filing for bankruptcy. This isn’t necessarily a bad thing, as bankruptcy can be the best option for clearing your debts and getting a fresh financial start. However, both the bankruptcy process and the divorce process are extremely complicated and involve a lot of complex legal issues.

If you are thinking about filing for bankruptcy, or if you are on the verge of filing for divorce, you need to be aware of the ways in which divorce can affect your bankruptcy petition – and vice versa.

The Financial Impact of Filing for Divorce and Bankruptcy

When a couple gets divorced, the effect on their joint and individual assets can be profound. In many divorce cases, the couple’s net worth gets halved overnight. Additionally, the division of joint property in a divorce could become a major point of contention when one of the spouses also files for bankruptcy. For instance, the bankruptcy trustee may determine that joint property needs to be sold in order to simplify the process. Beyond that, since the bankruptcy case will have to be resolved prior to the property and assets being divided in the divorce, it is possible that filing for bankruptcy could lead to a significant delay in the finalization of your divorce as your assets are temporarily frozen by the bankruptcy court. If you plan to file for Chapter 13 bankruptcy, for example, this could mean having to wait 3-5 years before the process is complete.

Another complication that can arise when a divorcing spouse files for bankruptcy, either before or during the divorce, is the effect that bankruptcy has on alimony or child support obligations. When one of the spouses in a divorce is on the hook for spousal support and child support, those payments can eat away at already-dwindling savings. Moreover, since these obligations are not dischargeable through bankruptcy, as set forth by Section 523(a)(5) of the US Bankruptcy Code, the ex-spouse will need to find a way to pay their marital debts or risk possible wage garnishment.

If your ex-spouse files for bankruptcy, it will likely have a serious impact on their credit going forward. The good news is that the bankruptcy should not affect your credit and is not supposed to appear on your credit report. That’s because your credit file is separate and apart from your ex-spouse’s credit file. However, it is still important for you to make sure that this is the case, so talk to a knowledgeable bankruptcy attorney who can double-check your credit history.


If you are struggling with debts, you should speak with a qualified bankruptcy and debt management attorney immediately. Joel R. Spivack, Esq., is an experienced bankruptcy lawyer who can help you explore your available legal options for getting out of debt. Contact Mr. Spivack now to schedule a free consultation.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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