One of the biggest adjustments to life after divorce is making due with just one salary. Sometimes your bills become too oppressive and you find yourself with extensive debt. In this case, bankruptcy can be a viable means of clearing your debt and starting with a clean slate.
Unfortunately, bankruptcy can also be a hazard to watch out for after divorce. If your ex-spouse is considering filing for bankruptcy so as to avoid the terms of your divorce, it is important to take action. Failing to safeguard yourself, and your finances, can lead to serious problems down the road.
Protection From Bankruptcy After Divorce
Should your ex-spouse file for bankruptcy immediately after your divorce is finalized, there are certain laws and requirements under those laws that can protect you. However, you should consider it your obligation to stay in touch with what your ex-spouse is doing. The more attentive you are the better you can keep yourself and you financial future secure.
If your ex-spouse files for bankruptcy, an automatic stay will go into action. This means that any debt collection efforts must stop and no lawsuits may be filed. The only lawsuit that can be legally filed is from you, in order to modify support awards finalized with the divorce.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 also provides protection. Unpaid child and spousal support claims are prioritized over any other claims (including taxes). If you are meant to receive support, you need to file a proof of claim with the bankruptcy court.
It is also important that you file a claim for property settlement debt with the bankruptcy court. Failure to do so may result in that debt being erased, which means you can't collect it in the future.
Although bankruptcy after divorce may bring about unfortunate circumstances, there is hope. Filing the necessary paperwork and fighting for your rights can bring about your desired outcome. If you are interested in working with a Detroit bankruptcy attorney to receive personal counsel, contact the Law Offices of Marshall D. Schultz today to learn more!