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What happens if my former spouse declares bankruptcy?

On Behalf of | May 21, 2024 | BANKRUPTCY LAW - Bankruptcy, DIVORCE - Divorce |

After enduring the arduous process of signing papers and dividing assets and debts, you expect closure. But just as you begin to navigate life after divorce, fresh challenges start to surface. The transition to shoulder expenses alone can often be overwhelming. Unfortunately, if your spouse declares bankruptcy, their decision could spell trouble for you.

The ripple effect of bankruptcy after divorce

A former spouse filing for bankruptcy can significantly impact the financial situation of the other party. Most of their debts may be discharged, relieving them of the responsibility to pay. However, this means creditors who are not bound by your divorce decree may turn elsewhere to satisfy the debt: you.

In Wisconsin, the law presumes debts incurred during the marriage to “be in the interest of the family,” regardless of who took it on. This means you could be held liable for these obligations, even if they were originally in your ex-spouse’s name.

One reassuring news is that bankruptcy does not discharge spousal support and child support. These payments must continue as ordered by the court. Another is that you will not be responsible for debts that were solely in your former spouse’s name.

The burden of paying off the remaining joint debt as a result of your ex-spouse’s decisions may be too much to bear.

It may be wise to reach out for help. A family law attorney who is also well-versed in bankruptcy law can help explain your obligations and strategize to safeguard your financial interests. Navigating this challenge may seem tough, but with the right support, you can rise from it.