Divorce and Bankruptcy in Alabama: The View from a Birmingham Lawyer’s Perspective

Posted by Steven D. Eversole | Jul 30, 2009 | 0 Comments

These days it's not hard to find families in distress. Divorce and separation loom large as people face a variety of stress factors that make for a daunting day-to-day existence for many married couples. Along with all the other challenges of married life, the current world economic situation has created more difficulties. From Birmingham and Huntsville to Montgomery and Mobile, we can all see it. As an Alabama divorce lawyer and family law attorney, I hear on a daily basis the hardships taken on by many married couples around our state.

Anybody who has ever been married knows that trouble with the family finances can easily trigger marital discord. In fact, financial stress is one of the most common factors leading to divorce. The past couple years have been extremely difficult, even for the most well-adjusted couples. Everyone is feeling the pressure and uncertainty of the global economy.

Some things cannot be controlled, but one point to keep in mind is that when family problems lead to divorce, it can be very tough on a person's finances. Of course, divorce itself can add to your costs, such as legal fees, a possible second residence and sometimes shared custody or support orders.

This is a lot to consider, especially if you are already in debt. Any additional financial obligations can quickly become overwhelming. With constant calls from creditors, some people begin to feel trapped to the point of filing for bankruptcy. But bankruptcy can also greatly impact certain aspects of your divorce.

For instance, which proceeding you file first can change what you own and owe under the law. Following a divorce, the language used in the divorce decree can even determine whether spouses' debts to one another are wiped out by the bankruptcy. If you're considering a bankruptcy during or after divorce, or if your former spouse is considering it, you must speak with a qualified family law attorney. I cannot stress this enough.

In a nutshell, most people have two options open to them. In a Chapter 7, or liquidation, bankruptcy, a person sells all of his or her assets they can in order to pay off your creditors. Any remaining bills are then forgiven. In a Chapter 13, or restructuring, bankruptcy, a person chooses to keep their assets while making a plan to gradually repay their creditors over a three- to five-year period.

In general, Chapter 13 is better for people who need to protect a large asset like a home, but who also have a steady income. Chapter 7, on the other hand, is generally available only to folks with smaller debts and fewer assets. One of the most important aspects of bankruptcy for most people is that it gives you an automatic and immediate stay — a legal document telling your creditors to ease off.

One additional point, in the case of completed divorces, you must remember that bankruptcy NEVER eliminates child support or alimony obligations, nor does it affect any legal judgments obligating you to pay attorneys' fees. However, debts owed by one spouse to the other as part of the divorce's property settlement may be eliminated under certain circumstances. The wording is critical, which is why you need an experienced divorce attorney to help protect your assets.

About the Author

Steven D. Eversole

J.D., Samford University's Cumberland School of Law, Birmingham, Alabama B.A., University of Alabama, Tuscaloosa, Alabama

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