How does divorce affect bankruptcy?

Question

My wife and I filed for Chapter 13 two years ago and have a little over 2 years left on paying the debt back. This payment is taken out of my check each week. I will be filing for divorce in two weeks and I am curious if anyone has been through this or if any one knows what will happen. Will I have to continue paying all of this...will it be split...will I have to pay it plus child support? We have a 12 year old daughter. Any help is appreciated. Thanks!!

Also we live in Georgia.

Answer 1

I think this is a good question, but I do not think the divorce would have any effect upon the payment plan under a Chapter 13. However, it will have to be dealt with in your divorce. The payment plan you and your wife entered is a binding agreement--essentially a contract---which you really do not dare violate or you lose all the benefits of the bankruptcy. The payments will be split in the divorce or, if you feel safer, you could assume all debt payments in exchange for less child support or more assets. The bottom line is that the divorce settlement should result in an equal distribution of assets and debts, but there are many ways to get to that point. When I say "bottom line", I'm using that phrase like an accounting term. The end result of the divorce should be financial equality for each of you. If you do not trust your wife to keep these payments current, take the debts and offset them against something else. By the way, the fact that you live in Georgia has no effect on the bankruptcy--that's federal. The divorce is wholly state law, however.

Answer 2

I live in KS my wife and I have a current chapter 13 which is being paid out of my monthly check. It covers the house and both cars plus med bills which are heavily hers. She wants a divorce and left me with the house and without her income I will not be able to cover monthly expenses and since we are doing 50 / 50 custody of 2 kids there is no support either way. How does this work im guessing I will have to resubmit the bankruptcy for each of us individually and more than likely let the house go any advice.

Answer 3

There should be a section in your divorce decree that states who pays what. Your lawyer should have a meeting with both of you to discuss who will be paying for what. If your soon to be ex doesn't want to pay for it then there isn't much you can do.

Another option to consider would be to try and convert the bankruptcy to a chapter 7. You should see if there is a time limit on conversions. You can also ask your bankruptcy lawyer what your options are too. Best of luck.