Practice Areas - Bankruptcy
F inancial difficulties are one of the greatest causes of marital discord. Moreover, when financial challenges are significant enough, it is not uncommon for one or both of the parties to file for bankruptcy protection during the divorce proceedings. This presents serious challenges for the economic resolution of the divorce since bankruptcy is controlled by federal statute and divorce is controlled by state statute. Federal bankruptcy laws take precedence over state divorce laws and procedures and the economic issues of the divorce may not be able to be resolved until the bankruptcy proceedings have been completed.
If only one of the parties has filed for bankruptcy, it may be a good idea for the other party to join in the bankruptcy to avoid becoming solely liable for marital debt. For example, if a divorcing party has joint credit card debt and only one party files for bankruptcy, his/her debt with the joint credit card company may be discharged, leaving the party who did not file for bankruptcy protection solely responsible for the joint debt.