while you are married and things are still rolling
Then, your spouse splits, or you decide to file divorce.
What happens to a joint bankruptcy when one of you files for divorce?
It sure changes the budget! Like the one to the left. ————–here
Let’s take Chapter 13 bankruptcy first.
All Chapter 13 bankruptcies are payment plans, and, are voluntary.
So one or both of a married couple can withdraw, pull out, of a Chapter 13 bankruptcy case any time.
Of course, that will leave you owing whatever balance of the debts that were NOT paid through the Chapter 13 bankruptcy plan, plus accrued interest per the contract rate for the time you were in Chapter 13.
You may get the divorce judge to order your spouse to pay some alimony, or child support, or house payment or other expenses, but it would be difficult, if not impossible, to force someone to stay in, and finish paying, a Chapter 13 plan.
So, why did you file Chapter 13? To save your house? Who is getting the house in the divorce?
I have a current client who filed, with spouse, to keep the house.
Two years into the Chapter 13 plan, the house payments are caught up, and the spouse split.
He wants to keep the house, but cannot afford the Chapter 13 payments without her income.
So, he converts his case to Chapter 7, files an updated budget, and keeps making the house payment.
So, in Chapter 13, you can keep going, if you can afford it, and your reasons for filing are still valid.
Or, you can withdraw your Chapter 13, no matter what the spouse does, and deal with your creditors.
Or, if your updated budget merits, that is, does not have a surplus for paying debts, you can convert your case to Chapter 7.
What about a joint Chapter 7 bankruptcy followed by a divorce?
Chapter 7 is a much shorter time frame, usually 4 months, than Chapter 13.
You can plan both, that is, file the joint bankruptcy to save money on getting rid of the debts before you file for divorce.
There is no right to withdraw a Chapter 7 bankruptcy case. You have to file a motion requesting that, and serve all the creditors and the trustee.
Usually, no one objects, because the creditors do not want their debtors under the protection of the bankruptcy court.
Watch out for conflicts of interest for your attorney, it is possible for you to use the same attorney for bankruptcy while getting a divorce, but everyone, you, your spouse, and the attorney should write out what the arrangement will be.
Yes, it can be complicated, so, talk to an expert certified consumer bankruptcy attorney.