I did a presentation a few months ago to a great group of Certified Divorce Financial Analysts and it was called “Bankruptcy and Divorce: What Else Can Go Wrong?” I’m bringing the topic over to our blog because a number of recent cases have involved ex-spouses, soon-to-be ex-spouses, and spouses behaving badly when it comes to finances.
General statistics show that financial stress and money are leading causes of divorce and relationship issues. In California, the community property rules also can cause a lot of problems because not only are your assets shared, but so are your debts. This can really complicate things when trying to figure out how to separate and keep your own credit intact.
For ex-spouses, problems sometimes come up with who was supposed to pay the debt, who actually did pay it, and who is trying to possibly file for bankruptcy. Also, depending on how your marriage settlement agreement, some debts your ex-spouse owes you may be discharged in bankruptcy. It’s very important that you have an experienced family law attorney help you with negotiating and drafting the settlement agreement.
With soon-to-be ex-spouses, there is sometimes cooperation regarding how the debt is resolved. Couples working together to file bankruptcy to clear the debt can often avoid problems down the road when they eventually become ex-spouses still worrying about if the other one is going to pay on that credit card or not.
Finally, spouses behaving badly when it comes to finances can sometimes be somewhat intentional, but it can also be how that spouse has always handled money issues and now it’s becoming the breaking point. I cannot emphasize enough knowing the full financial picture for the family so you can make the best decisions going forward, whether that’s with your spouse or on a different path.
All of the situations we run across when talking about bankruptcy and divorce are different. Each client has a different goal, different assets, different debts, so it’s really important to find out what your rights and options are early in the process. Even better, find out before you even get married.
This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.