Divorce and Bankruptcy

Matrimonial bankruptcy law is a section of the law that deals with bankruptcy and divorce. Lawyers practicing in this area help spouses determine and manage their debts following divorce.

As any lawyer will tell you, bankruptcy is traditionally held as a matter of personal liability. Debt collectors seek to determine who should be held personally responsible for the outstanding debts. Once this liability is known, a debt collector claims the debt by such means as seizing property. If the property is shared in a marriage, though, it will be held as the debt of both spouses. Examples of shared property that may have fallen into debt typically include houses, cars, and bank accounts along with other tangible and intangible assets. Regardless of what it is, if a property that carries a debt is held by both spouses, it may be considered community property.

This community property becomes an issue in a divorce. As spouses go their separate ways and property is divided, the question arises of who is responsible for the encumbrances and liabilities associated with the property. A matrimonial bankruptcy lawyer can help determine which spouse has personal liability for indebted community property. As a general rule, spouses are only held liable for the debt that they themselves incurred.

Still, it is always advisable to have a skilled litigator on your side in these matters because courts can create personal liability for you. In the process of dividing indebted properties, the court may decide that you bear some of the liability and must therefore pay, despite never having purchased a given property. This is an unfortunate occurrence and it further illustrates the need for skilled legal help in handling your divorce.

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