Lake County, Illinois, residents who have been through a divorce, or know someone who has, probably realize what a huge financial setback the process is.
At a minimum, both parties are going to walk away with much less household income and far less property to sell in order to pay off debts.
Additionally, many who divorce will face heavier tax burdens and may have to pay child support, spousal maintenance and may also have meet other obligations to their ex.
Oftentimes, this financial burden will get overwhelming, and an Illinois resident may have to consider filing bankruptcy in order to get relief from debt related to divorce.
Bankruptcy can help in these situations in a number of ways:
For one, with respect to other debts, like credit cards and medical bills, both a Chapter 7 and a Chapter 13 can afford a person some financial relief via the bankruptcy discharge.
After discharge, these types of debts ordinarily will be uncollectible, so a person does not need to pay them back. This means that a person has more disposable income with which he or she can meet the financial challenges of divorce.
With respect to what a person owes his or her former spouse, bankruptcy can still be helpful in the long term.
While spousal support and child support is normally not dischargeable in bankruptcy, the automatic stay may give a person temporary relief.
Moreover, whether a particular debt is considered child support or spousal support will depend to some extent on the person’s divorce settlement or decree. Some debts that are not related to alimony, support or other so-called domestic support obligations may be dischargeable even if they are debts one owes to his or her former spouse.