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Divorce after Bankruptcy

One of life's unfortunate truths is that difficult life events (and especially difficult financial events) sometimes come in groups. Divorce and bankruptcy, for example, sometimes come as a pair, because of the financial stress divorce can cause and the relationship stress that a bankruptcy filing can cause.

If you'd like to consult with a lawyer right now about the impact that a divorce might have on your post-bankruptcy finances, please fill out this form. You can arrange a free, no-obligation consultation with a bankruptcy lawyer near you and explore your options.

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What You Need to Know about Post-Bankruptcy Divorce

If you and your spouse decide to divorce after a bankruptcy filing, there are some important financial and legal matters that you should consider. Here are a few.

  • Get legal representation: If you worked with a lawyer during your bankruptcy filing, that lawyer may no longer be able to represent you and your spouse due to a conflict between your interests and your former spouse's interest. To make sure that each of you has legal counsel with your best interests in mind, you may each have to retain your own lawyer.
  • Make repayment arrangements: If you and your spouse filed under Chapter 13 of the U.S. Bankruptcy Code, it's important that you determine how the repayment plan will work. In other words, you and your spouse need to agree (preferably in writing) who is responsible for paying what debts. Keep in mind that your bankruptcy repayment obligations still stand, even if the divorce court divides your debts. You and your spouse must communicate about making payments or else risk losing the protection of the court.
  • Establish separate accounts: Another financial concern that you will likely have after divorce is the establishment of separate financial accounts. If you and your spouse have been using primarily joint accounts, you may have to re-divide your finances.

Rebuilding Credit after Bankruptcy and Divorce

One thing that bankruptcy and divorce have in common is that they can leave people with damaged credit – after all, if you have been relying on your spouse’s credit history for loans for the duration of your marriage, you now face the task of building credit in your own name.

Similarly, if you've filed for bankruptcy, your credit needs to be rebuilt.

Here are some strategies for doing just that:

  • Stay current on payments: Whether you're responsible for Chapter 13 payments, rent, utilities, mortgage, child support or some other type of payments, make sure you keep up to date on these obligations. Payment history is one of the most important contributing factors to your credit score.
  • Take out a small loan when you can: At some point, it's probably a good idea to open a new credit card (which can both be useful in emergencies and help to boost your overall credit rating). You may have to wait several months after a bankruptcy filing to qualify for a card, but once you have it, make sure to pay off your balance in full every month.
  • Save what you can: Even if you can only save a few dollars a week, get in the habit of socking some money away – in a crisis, a small cash cushion may make the difference between disaster and quick recovery.

Ask a Lawyer for Help with Divorce after Bankruptcy

If you'd like more information or guidance about what to expect from a post-bankruptcy divorce, take the time to speak with a bankruptcy lawyer near you.

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