If you have recently filed for bankruptcy as a result of a divorce (pending or otherwise), your focus will likely be on your life after the process is completed. Both processes are stressful and emotional, but life after a Florida bankruptcy and divorce can be the fresh start you need to find the happy life you deserve.
Bankruptcy pre-divorce
Divorce can complicate or simplify your bankruptcy filing. If the bankruptcy filing is done prior to the divorce, the marital and separate estate will be part of the proceeding. This will mean that your debts (joint and otherwise) will likely be discharged prior to the divorce property division.
This will streamline that process in a subsequent divorce. Though, if you are looking for a speedy divorce, the bankruptcy will delay, possibly significantly, the divorce as the Florida bankruptcy court has primary jurisdiction.
Bankruptcy post-divorce
A bankruptcy post-divorce will not affect the divorce because it occurs after the divorce. Though, you may still have to deal with debts that were assigned to your now, ex-spouse in the divorce settlement.
In the bankruptcy case, you may be found liable for those debts if they are still in your name, or you are a co-signer. This means that, if your ex does not pay those debts, the creditors can still sue you to collect, which is why they can affect your bankruptcy case. You must have your name removed from those debts by the creditors.
Alimony and child support
In a bankruptcy proceeding, domestic support obligations include alimony and child support. Neither is dischargeable in a Chapter 7 or Chapter 13 bankruptcy, which means these divorce obligations are not affected by bankruptcy.
Unlike with other debts, bankruptcy may not stop alimony and child support collection efforts. This means that your wage garnishments and tax intercepts may still occur during bankruptcy.
However, those payments will affect your other debts. For example, the Chapter 13 bankruptcy payment plan gives alimony and child support payments priority over all other debts. Similarly, Chapter 7 bankruptcy debts are prioritized and reduce the distributions available to other creditors.
The takeaway
When facing bankruptcy and divorce, consult with your team and your soon-to-be ex-spouse about your best path. Everyone’s circumstances are different, and it may make sense to file for bankruptcy prior to a divorce or after.
