Because it is so often the cause of a divorce, marital debt is an important issue to be resolved. Many times a Property Settlement Agreement (PSA) will be drafted and entered into to deal with this issue. Often, the deal is that one spouse will get the marital home in return for paying the marital debt.
But before this is done, a more important question that needs to be asked is whether either spouse is able to pay the debt in the first place? If the debt is too overwhelming, then that agreement won’t last very long. That is where bankruptcy can be very helpful in your divorce.
How Bankruptcy Can Help
Discharging marital debt in a bankruptcy takes that issue off the table for the divorce. It also removes the risk that the spouse that agreed to pay the debt in return for a marital asset does not turn around and file later, upsetting the carefully crafted balance of the PSA.
That is the one big reason why I recommend that people discuss a possible bankruptcy filing with their divorce attorneys as a part of their overall strategy. Many times a chapter 7 bankruptcy can make it easier to come to an agreement on the marital property and eliminate potential problems down the road.
So What Do I Do?
If you live in southern New Jersey and are in the middle of a divorce and struggling with marital debt, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case. You could end up with a less expensive divorce and a lasting fresh start.
If you are looking for more information on how bankruptcy might help you with your divorce, then you should download my free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy.