If you have been involved in a divorce, you may be wondering what happens to the debt that was divided in your divorce agreement. You may also wonder what happens if your ex files for bankruptcy. These answer depend on a few factors surrounding you and your ex.
If the debts you split in your divorce agreement were joint, you are still on the hook for paying the full amount even if your ex is awarded the full debt amount in the divorce. However, you can be reimbursed by your ex if you back the debt. To do this may require to go through the court system if your ex does not voluntarily pay you back. Going through the courts to collect may cost you more than filing for bankruptcy.
On the flip side, if you were awarded a joint debt in the divorce agreement, filing for bankruptcy does not get you off the hook to reimburse your ex if they pay the debt. Filing for bankruptcy only prevents the creditor or collection agencies from collection efforts. The divorce agreement can still force you to pay damages to your ex for violating the divorce decree.
If you are considering a divorce, it may be wise for you and your spouse to file bankruptcy together before filing for divorce. Doing so can cut down on the headaches described above. It can also cut down on the costs of your bankruptcy and your divorce. Contact us today for a free consultation to review your options.