One of the leading causes of divorce in our country is related to the handling and mis-handling of household finances. Money issues cause stress. Whether it’s from worry about your future stability, making drastic changes to your lifestyle, or even casting blame on the profligate habits of your spouse, the burdens of debt play havoc with what should be your strongest relationship.
Are you contemplating divorce and wondering how this impacts your credit? That depends on a lot of factors.
First: Do you have joint debt with your spouse?
Who do you think will be responsible for paying those debts? If you think it’s your spouse, let me just warn you, that the credit card company, the mortgage company, and the car loan company don’t give a fig about your separation agreement or divorce decree. If your spouse doesn’t pay they will come after you. Does your divorce require your spouse to “take your name off of” a debt? Guess what. It’s not up to him. The only sure way to remove your name from an account is to pay it off and close it.
Second: Does your spouse have good credit?
Your spouse could attempt to refinance the house, car or even credit cards in their own name, thus relieving you of the liability when and if the loans are defaulted. If debt was a leading contributor to the decline of your marriage, however, you may discover that your spouse no longer has the credit required to do this.
Suggestions From a Baltimore Bankruptcy Lawyer
Yes, Bankruptcy can help you here. It can help you more if you and your soon to be former spouse can work together and keep a common interest in getting out of debt. If your situation is such that your debts are insurmountable together, how can either of you expect to manage them apart? Maybe you can, some people do. But it may be a better option for the two of you to consider a joint bankruptcy. You’re still eligible to file jointly even if you are living separately. Until the Divorce Decree is signed and filed, you are a married couple in the eyes of the Federal Courts and that is the only requirement for filing a joint bankruptcy.
“My Divorce Attorney told me that my spouse would be responsible for all of the debt and that they couldn’t come after me.”
This is partly true. You can make your former spouse responsible, to you. You on the other hand are still responsible to the credit card company. So, if they sue you, you can sue and demand repayment from your former spouse, EVEN IF HE FILES BANKRUPTCY! But this doesn’t solve your problem. If your former spouse filed bankruptcy, it may be because they didn’t have the money to pay this or other debts. So, yes, you can demand payment from your former spouse until you’re blue in the face, but that doesn’t mean you’re going to get anything. And all the while your creditor can garnish your wages, freeze bank accounts and otherwise make your life much more difficult.
“What must we consider to file a Joint Bankruptcy while our divorce is pending.”
You actually don’t have to file jointly, but this Baltimore Bankruptcy Lawyer can tell you that most joint petitions cost a lot less than two individual petitions. However, if you and your spouse can’t agree on the goals of the representation, or if one of you seeks to harm the other during the course of the representation, your attorney will have a conflict of interest and be unable to represent you. You see, the attorney for your joint bankruptcy represents BOTH of you, EQUALLY. They cannot play favorites. This Baltimore Bankruptcy Lawyer will not represent a couple that cannot agree on how to proceed.
Some people see Divorce as an opportunity to put the past behind you and start fresh again. Bankruptcy is the same way. It offers the chance for single people and married couples to start fresh, without the burdens of debt tying you down.
For more information or to speak to an attorney about your pending divorce or separation, please feel free to hit the contact link on the right-hand margin or give us a call at (410)870-9315 today for a FREE consultation.