Colorado Law On Bankruptcy With Divorce
Filing a bankruptcy petition can affect both spouse's financial circumstances before, during and after divorce. Individuals with questions regarding how bankruptcy laws affect divorce should consult with a Colorado lawyer for assistance.
-
Financial Issues in Divorce
-
Divorce involves many financial issues. The couple may need to negotiate ongoing spousal support, which Colorado law refers to as "maintenance." The couple must also divide marital property and assign debts to each spouse---the Colorado family court will make orders regarding debt division if the spouses cannot agree by themselves.
Types of Bankruptcy
-
According to the "Colorado Divorce and Family Law Guide," written by the Colorado law firm of Black & Graham, LLC, individuals filing for bankruptcy have two options: Chapter 7 Liquidation and Chapter 13 Restructuring. Each option has a different effect on property, debts and spousal support obligations.
Chapter 7 Bankruptcy
-
In Chapter 7 bankruptcy, certain property is exempt from liquidation and excluded from the bankruptcy estate---most creditors cannot reach exempt property. To enforce a spousal or child support order, however, a Colorado family court can order payment from any property or earnings not part of the bankruptcy estate. Regarding liability for marital debts even after a divorce judgment, the U.S. Bankruptcy Court, District of Colorado, recommends that an individual consult with a lawyer if her ex-spouse has filed for bankruptcy.
Chapter 13 Restructuring
-
A Colorado family court cannot order enforcement of spousal or child maintenance while the ex-spouse responsible for paying has a Chapter 13 bankruptcy petition pending.
-
Related Searches
References
Resources
- Photo Credit debt defined image by Christopher Walker from Fotolia.com
