What Divorce-Related Debts Can Bankruptcy Erase?


If you're experiencing financial problems and thinking about filing for divorce in Pasadena, you might be wondering if filing for bankruptcy would be beneficial.

In some cases, bankruptcy is truly your only option for getting back on your feet. However, bankruptcy doesn't eliminate all forms of debt. The type of debts you owe will play a big part in deciding whether or not bankruptcy will be helpful to you.

Bankruptcy only excuses you from debts that you've specifically listed on your bankruptcy application, assuming that these debts qualify. In most cases, bankruptcy can eliminate the following types of debt:

  • Credit card debt
  • Medical bills
  • Unpaid utility bills
  • Miscellaneous unsecured debts
  • Loan balances on foreclosed property
  • Unpaid rent debt incurred as the result of an eviction
  • Debts incurred as the result of a vehicle accident, unless you were under the influence of drugs or alcohol at the time

Bankruptcy won't excuse you from:

  • Obligations to pay attorney fees relating to your divorce
  • Spousal support
  • Child support
  • Student loans
  • Tax debts

Once you've decided to file for bankruptcy, you need to think about whether it's in your best interest to file before or after your divorce.

If you and your spouse are experiencing serious financial difficulties, a joint bankruptcy filing before your divorce might be the right solution because it will simplify many of the issues regarding the distribution of marital assets and debts. Additionally, the filing fees are the same for both joint and individual bankruptcies.

However, there is an income qualification for a Chapter 7 bankruptcy that was added in 2005. The income limits for couples are not double what the limits are for a single person. In some cases, this means you might be able to qualify for a Chapter 7 bankruptcy only if you file on your own.

If you file for bankruptcy on your own while your case is still being decided, the family court isn't allowed to split up assets until it receives permission from the bankruptcy court.

How Can We Help?

If you are in need of legal representation during your divorce, please call our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com. Our experienced Pasadena divorce attorneys are eager to advocate for your needs throughout the divorce process.