Many people wonder how their divorce debts will be impacted by bankruptcy. Knowing which debts can be discharged by bankruptcy can be helpful in preparing for the financial aftermath of a divorce. Navigating this can be incredibly complicated, depending on various factors. Talk to a Chattanooga bankruptcy attorney to learn more.
Effects of Bankruptcy on Divorce
The Tennessee divorce laws explain how bankruptcy may impact certain payments involved with a divorce. These payments usually include spousal support and property division. Different circumstances may impact the outcomes of bankruptcy discharge in relation to divorce depending on multiple factors.
However, certain aspects are more straightforward. For example, Tennessee laws do not allow spousal support to be discharged in bankruptcy. Tennessee laws also do not allow any debts to a former spouse or child to be discharged under bankruptcy. These are debts that do not count as spousal support.
Any debt that was built up during a divorce is not dischargeable through bankruptcy. This means debts for property settlements during a divorce proceeding cannot be discharged with bankruptcy. Complaints can be filed to declare certain divorce debts non-dischargeable.
This can be achieved through a bankruptcy court order to declare the debt to be a non-dischargeable marital obligation. The effect is not having to deal with future proceedings to determine spouse rights after bankruptcy.
Important Bankruptcy Information
Important information about bankruptcy may help keep you from facing legal challenges when filing for bankruptcy. Debt discharge erases your debt but lowers your credit score. However, debt discharge is limited and cannot be used for alimony, child support, court fines, or taxes.
An important aspect to know about divorce and bankruptcy is that debt that occurred after filing for bankruptcy cannot be discharged. If your spouse does not reveal debt until after you file for bankruptcy and you become responsible for this debt, debt discharge may not work. In other words, you could be stuck with this debt despite filing for bankruptcy.
Any debt that is not listed during the bankruptcy filing may not be discharged. This is why it is crucial to make sure all debts are listed ahead of time before filing for bankruptcy. Divorce cases can make this complicated when spouses attempt to conceal debt.
Concealing debt could also lead to fraud, which often results in a denied bankruptcy case. A common form used for Tennessee divorce debt division and property division can help start this process. This form has both spouses list out their personal property and debts each will agree to pay. Filling out this form may help you and your spouse figure out which debts can be listed when filing for bankruptcy.
Call Tom Bible Law Today
Trying to figure out which debts will be discharged in bankruptcy when going through a divorce can be confusing. Feel free to call us at Tom Bible Law today at (423) 424-3116 for a consultation about your bankruptcy options. Our dedicated legal team of Tennessee bankruptcy lawyers is determined to help you explore all your legal options related to bankruptcy during a divorce. We serve clients throughout the Tennessee cities of Chattanooga and Tullahoma.