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The interplay between divorce and bankruptcy

When an Escondido resident is contemplating whether or not to move forward with filing for bankruptcy, this enormously important decision is often made under less-than-optimal circumstances. For instance, many people who are facing financial challenges are dealing with medical issues that are driving up their debt burden, and as a result they have to worry about both their health and their financial problems. Or, others have lost their job and despite their best efforts simply cannot find another one in today's economy. But, for many people, the prospect of filing for bankruptcy comes up amid talk of a divorce.

Legal proceedings in a divorce have the potential to be complicated enough, even when the family law issue is the only matter to be resolved. But, when personal bankruptcy of one spouse or the other comes into the equation, the whole ordeal can become much more stressful.

However, many people may consider filing for bankruptcy in association with a divorce at the wrong time. In some cases, it makes more sense for a couple contemplating divorce to file a joint bankruptcy petition prior to filing for divorce. Doing so can resolve debt issues prior to the dissolution of the marriage, potentially making the divorce proceedings go much more smoothly.

For some people, the need to file for bankruptcy does not arise until after a divorce. When this happens, there may be issues with discharging financial obligations pursuant to a divorce decree, like child support or spousal support. These matters can be complicated, with a multitude of legal terms being thrown around by one party or the other. In any bankruptcy action, but especially in one associated with a divorce, getting the right information can make the difference in the end result.

Source:, "Discharge of Divorce Debts in Bankruptcy: The Timing of a Bankruptcy Petition - Before or After the Dissolution?" Arthur W. Rummler, accessed Dec. 6, 2014

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