Divorce During Bankruptcy as per Law and divorce during Chapter 13 Bankruptcy depending on the state you live in, some or all of the equity in your home may be protected as a married couple. However, if you move out of the marital home or file for divorce during the bankruptcy, that bankruptcy exemption may be lost.
What Happens if you get Divorced While in Chapter 13
If you are involved in a Chapter 13 Bankruptcy and decide to file for divorce during the repayment period, you can choose to cancel or restructure the bankruptcy plan. By canceling, you agree to stop the agreed upon payment plan; however, all debt you and your spouse have assumed will still be your responsibility.
Can you File Bankruptcy and Divorce at the same Time
It’s usually best not to file for both divorce and bankruptcy at the same time. Here’s why. While it is possible to file for divorce and bankruptcy at the same time, it can create unnecessary delays and complications in both matters.
Can Bankruptcy Stop Divorce Settlement
It is rare that a debtor can hide assets successfully during bankruptcy. However, if the debtor and the non-filing ex-spouse reach a divorce settlement six months or more before the bankruptcy filing, it is unlikely that the divorce settlement will be reduced during bankruptcy.