Helping With Your Financial Future

Filing for bankruptcy after divorce

On Behalf of | Nov 3, 2023 | Chapter 7 Bankruptcy

The social stigma that some people attach to filing for bankruptcy may make you feel like a failure if you end up declaring personal bankruptcy following your divorce. However, if your debts have gotten out of control, filing for bankruptcy may be the fresh start you need. 

Anxiety can take over when you constantly receive collection calls from utility providers and debtors. The good news is that once you file for bankruptcy, an automatic stay will be issued by the court. This means that the harassment from your debtors will stop right away.

Non-dischargeable debts

Filing for Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” can help eliminate unsecured debt, but certain debts cannot be discharged. Under the U.S. bankruptcy code, the following are considered non-dischargeable debts:

  • Alimony and child support. If you file for bankruptcy, you are still required to pay the monthly child support amount that was ordered by the court. There is one exception to this rule. If you continue to make timely payments, you are eligible to file for bankruptcy to recover any unpaid alimony or child support.
  • Student loans cannot be discharged in bankruptcy, whether you file Chapter 7 or Chapter 13.  However, if you can prove to the court that you have made good faith payments and your current financial status is not going to change anytime soon, the court may allow you to include your student loans in Chapter 7. 
  • Back taxes cannot be charged off in a Chapter 7 bankruptcy. There are a few exceptions to the rule. If your tax debt is more than three years old you may be able to discharge the debt.

Filing for bankruptcy following divorce can be a daunting task. Complications are bound to arise, and you may not be familiar with how to handle them. Seeking legal assistance from a knowledgeable source is essential, as they can help you navigate the many intricacies involved in the bankruptcy filing process.