Many divorces here in New Jersey arise out of financial troubles and fights about money. Debt becomes overwhelming and puts a huge strain on the marriage. This can result in one of the spouses filing bankruptcy.
But did you know that filing that bankruptcy could cause problems for the equitable distribution of your marital assets? This can happen if some of the property was purchased on a credit card offered by a particular store, like Best Buy, Sears, Raymour and Flanagan, and the like.
This is because many people don't realize that when they apply for the credit card account that that have agreed to grant a lien (just like on a house or a car) to the bank on anything you purchase with it.
This might not make a difference to you, unless you are filing for bankruptcy; then it can make a big difference in whether you will be totally free of the debt.
So How Does This Affect My Divorce?
So what if a lot of the "stuff" being divvied up in your divorce was purchased on a card that is in one or both of your names? You may well be required to continue to make monthly payments, and preserve the lien on the property during that time.
Other issues can also arise, including:
- You can't sell or give away the property without paying off the lien
- A "Buy-Out" of one spouse to the other for marital property must contemplate the lien balance
- Agreements for trade-offs of marital property (you get the furniture, I get the car) can be complicated if both spouses signed on the credit card account
So What Do I Do?
It is for these reasons that I recommend having a bankruptcy attorney work with your divorce attorney to address these issues. Agreements on equitable distribution have to address potential ongoing liability issues on marital debt.
If you live in southern New Jersey and are thinking about filing bankruptcy, please call me at 856-432-4113 or contact me through this site to schedule an appointment to discuss your case.
If you are looking for further information, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.