FLORIDA DIVORCE AND BANKRUPTCY

FLORIDA DIVORCE AND BANKRUPTCY

Many parties involved in a Florida divorce action think about filing bankruptcy to discharge the marital debt. The thought process makes sense, start your life anew. However, sometimes it doesn’t work out as planned.

SHOULD I FILE BANKRUPTCY BEFORE OR AFTER I FILE FOR DIVORCE?

Timing is critical. Filing for bankruptcy can make the Florida divorce process easier to manage because the issue of marital debt will be decided by the bankruptcy court and not the divorce court. To benefit from this scenario, the parties must file a joint bankruptcy petition and receive a discharge before filing for divorce. Filing a bankruptcy petition during a divorce proceeding will slow down the divorce process.

IS MARITAL DEBT DISCHARGEABLE?

Whether or not the marital debt is dischargeable in bankruptcy depends on the circumstances. Some marital debt is known as domestic support obligations (alimony and child support). Domestic support obligations (DSO) are not dischargeable in bankruptcy. If a spouse assumes all the marital debt and that is expressed in a Final Judgment, and then he or she files bankruptcy, the debt may be considered a DSO, and will not be dischargeable.

MY EX-SPOUSE ACCEPTED RESPONSIBILITY FOR THE MARITAL DEBT

Also, if a spouse assumes all the marital debt in a settlement agreement, and then fails to satisfy the debt, the other spouse may be held liable for full payment of the debt. This can happen because the creditor is not a party to your settlement agreement and is not subject to it.

If you need strong, experienced counsel to represent your interests in a family law matter, please feel free to call or e-mail The Fuller Firm, LLC. A free phone or videoconference consultation will be scheduled. After a thorough analysis of your matter, I will answer your questions and advise you regarding the best way to proceed.