Unfortunately, it is very common for a person to need to file bankruptcy after a dissolution of marriage (divorce). There are certain debts that you cannot discharge. You should know the rules and laws regarding debt you took on in your Marital Settlement Agreement or via a Court Judgment after a trial.
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Can I discharge marital debt?
After a Divorce (dissolution of marriage), people take on some marital debt in joint names, or even sometimes just in the other person’s name. You may not discharge marital debt in a chapter 7 case if said debt was distributed to you in a dissolution of marriage action and it is not in your individual name, unless your former spouse is agreeable to the same.
Marital debt you acquire as part of the dissolution action may be dischargeable in chapter 13 bankruptcy. If you want to discharge marital debt, this is something that should and could be done before having the dissolution action completed. It may be a good strategy to agree with your spouse to discharge marital debt before the dissolution is finalized to give you both relief from the debt, this can be for a chapter 7 or 13.
Can I discharge attorney fees?
You may not discharge attorney fees and/or other debts you are required to pay pursuant to your dissolution action under chapter 7 (where you discharge all of your debt). However, under code 523(a)(15), claims and the related attorney’s fees are dischargeable in a chapter 13 case as long as the debtor makes all plan payments and receives a discharge. If the debtor does not make the payments and does not receive their discharge, the debtor will still owe the money, not only for the attorney fees but other debt that was in the bankruptcy plan as well.
Depending on the amount of debt involved, even if the debtor qualifies for chapter 7, chapter 13 may be a better option to get rid of that extra debt.
