Divorce, coupled with bankruptcy can pose serious problems for those involved. When a married couple who no longer wishes to remain together have debts piling up and are heading for divorce, bankruptcy might be one way to sort out the financial issues. Bankruptcy has the capacity to be filed by just one spouse, or jointly. The effects of bankruptcy on divorce proceedings? Abrupt at best. An automatic stay will put an end to all activities on divorce proceedings.

Although one lawyer may seem trying in a time of stress, two lawyers may be necessary to sort the matters out, a bankruptcy attorney and a divorce lawyer to hash things out between the unhappy couple. Some good advice to take would be to immediately seek out a bankruptcy lawyer to guide you through your finance, in addition to the attorney who is assisting you through your divorce. The expert guidance with alimony, child support, property settlements, and other financial issues is key when you are suffering from the stress of bankruptcy and divorce simultaneously.

If the couple shares a large amount of debt, filing for bankruptcy jointly is a good option. This can even simplify the divorce settlement, and filing bankruptcy jointly is more cost efficient. If you are a spiteful ex, filing individually for bankruptcy is a good way to send the creditors after your spouse.

Then there is the issue of property that you have accrued during marriage. That’s marital or community property. If you are filing jointly for bankruptcy, and your former spouse has marked some of your separate property as marital property, you should take these actions. First, you should prove what is yours is not community property. The bankruptcy court will release the exempt property, and the remaining property that you share will be part of the bankruptcy estate and therefore will be utilized for paying off debts.

After the bankruptcy court has figured out which property is exempt from bankruptcy, the divorce court can split the property between the spouses equally. The non exempt property will be sold by bankruptcy trustees (representatives) to pay off debts.

A different way to steer clear of financial loss on account of your former spouse’s debt is to attach a property of your spouse as a security lien. This lean will permit you to take hold of the property and utilize it to pay off your spouse’s loan if he or she is thinking of ditching and letting you pay. The property with a lien may get you less than the market price, but this is still a good way to protect yourself.

Finally, you can work an indemnity clause into your divorce decree. This will help guard you from creditors who are coming after you to pay for your ex spouse’s debts after the divorce. If your husband or wife files for bankruptcy, don’t worry. The judge will enforce it to protect you.