Introduction
Divorce and bankruptcy are both devastating events in a person's life. When they happen at the same time, the stress can become almost unbearable. However, it is possible to live through both events by getting good legal advice, developing a budget with a professional credit counselor and taking care of yourself physically, emotionally and spiritualiy. Your first priority should be to find competent legal counsel: A good lawyer can tell you how to protect yourself in a divorce and help sort out the special issues that arise due to your financial situation. You can also ensure that your bankruptcy filing is done correctly by working with a skilled bankruptcy attorney that can help you get the debt discharge that you need.
Get Two Good Lawyers
Unless you can find a lawyer that specializes in both divorce and bankruptcy, you'll need to hire two attorneys. Make sure that you tell each attorney that you are divorcing your spouse while also filing for bankruptcy. Both attorneys need to know that you are filing for divorce and bankruptcy at the same time so that they can properly handle your situation. Your divorce attorney should request a discovery hearing in which both you and your spouse must turn over financial records for examination. This will help protect both you and your spouse from having to pay debts that either one of you did not know about. It is also important to keep close tabs on your finances prior to filing for bankruptcy.
Protect Yourself in Your Divorce Decree
Review your divorce decree with your attorney to make sure that you are protected in case your spouse files for bankruptcy or defaults on any joint debts after your divorce is final. Creditors aren't bound by your divorce decree, so if a creditor thinks that it can get money from you, even if the divorce decree declares your spouse legally responsible for your debt, the creditor can try to get a judgment against you in court. If this happens, you are subject to wage garnishment, bank account levies and any other collection tactics that are legal where you live. In such cases, your only recourse is to take your spouse to court to enforce the divorce decree. If you or your spouse declare bankruptcy, creditors may decide to sue the other spouse to collect debt. As such, it may be wise to talk to your attorney about filing bankruptcy jointly or separately. Do not, however, make any financial agreement with your spouse until you have received legal advice.
Get Counseling
If you live in the United States, you must go through credit counseling before you can complete the bankruptcy process. Don't rush through the required counseling just to get it done. A good credit counselor can really help you to understand your finances as well as the reasons why you got into debt. Work with the credit counselor to establish a realistic budget so that you can get through this difficult time without additional financial stress. You may also want to talk to a divorce counselor who can help you sort out your feelings. By stablizing your emotions, you'll be better able to make good financial decisions.
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