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How do bankruptcy proceedings affect divorce proceedings?

Arizona residents may have noticed that sometimes life changing events come in pairs - a divorce may lead to financial troubles or vice versa. While a divorce puts an end to the legal relationship between the couple, one party may still be held accountable for the other party's debts if certain steps are not taken. When the divorcing couple is also in the middle of bankruptcy proceedings, they should keep a few things in mind to streamline the process and ensure it goes as smoothly as possible.

First, even though declaring bankruptcy wipes out most debts, not all are dischargeable, especially those that arise in divorce proceedings. Alimony and child support cannot be discharged, but liability for joint debt to some other creditor may be discharged. This has the effect of removing that party's responsibility from repaying the debt.

In addition to this, bankruptcy proceedings affect division of property. When a couple who plans on divorcing files for bankruptcy before the divorce proceedings and most of the debt is dischargeable, then who gets the debt is no longer a question in the divorce proceedings. Also, a divorcing couple should remember that bankruptcy trustees may have to repossess some items to fulfill creditor claims and this may affect division of tangible assets in a divorce settlement.

Some couples may even want to consider filing for bankruptcy jointly because it benefits both parties. Even though it may slow down the divorce proceedings, it may end up being more economical in the long run.

Relationship troubles and financial woes may strike at any time and one may end up straining the other. The protections offered by filing for personal bankruptcy may be one way Arizona residents can free their mind from debt problems so that they can focus on their relationships.

Source:, "Divorce, bankruptcy sometimes go hand in hand," Gene Turnwald, Sept. 27, 2013