8 May 2012 0 Comments

Divorce and bankruptcy

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With the economy the way it is today, many couples facing divorce are found to be under considerable financial stress as well.  Today too many couples get themselves into substantial debt by taking out loans for homes, automobiles or credit card charges.

When they decide to end their marriage, what happens to this debt?  Sometimes bankruptcy seems the best way to get out of the debt – it might be your only legal option to pay the creditors.

If the couple has already started divorce proceeding and one spouse decides to file for bankruptcy, an automatic stay becomes effective and a bankruptcy estate is created that contains non-exempt property.  The court does not divide the property in the bankruptcy estate.  Keep in mind that bankruptcy proceedings can delay the division of marital property.

If you find yourself in this situation, contact an experienced Riverside Family Law attorney who will advise you on your best options and the best way to move forward.

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