How Debts From a Divorce Are Handled in a St. Louis Bankruptcy

Very often when a divorce proceeding is finalized, the judge will divide certain property between the husband and wife. This property can be in the form of real estate, furniture, automobiles, or even kitchen appliances. In addition, the judge may divide certain marital debts that you accumulated over the course of the marriage. If in fact such a division was made pursuant to a divorce order, and you thereafter file for bankruptcy, there are certain rules that you should be made aware of.

Generally speaking, unsecured debts like St. Louis credit cards, medical bills, payday loans, and deficiencies from past contracts, are discharged in a Missouri or Illinois bankruptcy. But if the unsecured debt in question was part of a divorce proceeding, then further analysis must be undertaken. Depending on the nature and character of the debt, it is possible that it cannot be discharged in a St. Louis Chapter 7 bankruptcy. The analysis is a three-part question: 1) was the debt in question created during the course of the marriage (and therefore marital property)?; 2) was the debt jointly owned between you and your spouse?; and 3) did the judge order you to pay that particular debt? If the answer to all three of these questions is ‘yes,’ then the debt is described as non-dischargeable in a Missouri or Illinois Chapter 7.

Of course, divorce debt of this kind can very easily be the sole reason for why you are contemplating bankruptcy in the first place. If this is the case, then a St. Louis Chapter 13 bankruptcy may be the better fit. In a Missouri or Illinois Chapter 13, divorce debt can in fact be discharged because the Bankruptcy Code allows for what is known as a ‘super discharge’ of debts. This super discharge includes the likes of divorce debt that the judge assigned to you. The Chapter 13 also allows you the opportunity to come current on any mortgage arrearage, car notes, tax debt, or back child support (along with potentially stripping off a second mortgage on your home, lowering the amount owed on your car down to the actual fair market value of the automobile, and discharging the rest of your unsecured debt).

The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have discharged tens of millions of dollars in unsecured debts over the years. Our goal is to guide you through the process from start to finish, and get you the fresh start / clean slate that you deserve.