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Starting over can mean divorce and bankruptcy

On Behalf of | Jul 10, 2024 | Bankruptcy & Divorce

Money problems are a major source of strain for many couples, and sometimes, despite best efforts, the situation becomes untenable. Considering divorce or bankruptcy might feel like the only way out. Both can be paths to a fresh financial start under Florida law.

How is debt divided between spouses?

As an equitable distribution state, Florida divides your marital assets and debts fairly, not necessarily equally, during divorce. This includes everything acquired during the marriage, except for certain inheritances and premarital assets. Debts like credit cards and mortgages are also subject to division.

It is crucial to determine which debts are marital, or those incurred during the marriage for the benefit of both, and which are separate, or those incurred by one spouse before marriage or for their own benefit after marriage. If your spouse’s debts are due to reckless spending or gambling, a court may consider them separate and not include them in the marital property division. Gathering evidence to prove this can be complex.

Bankruptcy as a fresh start

If your marital debt burden feels insurmountable, even after divorce, bankruptcy might be a viable path. There are two common types of bankruptcy for individuals:

  • Chapter 7: This option discharges most unsecured debts (credit card debt, medical bills, etc.). There are limitations on what assets you can keep.
  • Chapter 13: Each month, you will send a payment to a court-appointed trustee, who will then distribute it to creditors. You may be able to keep your assets while catching up on missed payments.

An important note is that you can file for bankruptcy and divorce without your spouse’s consent.

A difficult yet necessary step

When debt spirals and a solution seems impossible, divorce and bankruptcy can be stepping stones to a more secure financial future. It is imperative to seek professional guidance during this difficult period. Many individuals who navigated these legal processes and found financial stability often involved enlisting a qualified attorney’s help.

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