Divorce and bankruptcy in Georgia

Savannah GA Divorce Lawyer

One of the key features of the new bankruptcy rule is the introduction of means test. Anyone who wants to file a Chapter 7 bankruptcy has to undergo a means test. The means test uses annual income limits based on household size as one factors of eligibility.

The division of payments and debts in a divorce must always take into consideration the chances that one spouse or the other might file for bankruptcy after the divorce. Spousal maintenance payments will not be discharged by bankruptcy but non-specific obligations from one spouse to the other can. Therefore, if the couple agrees that one spouse will pay the other a lump-sum instead of on-going maintenance payments, it will still be identified as maintenance and so it will not be discharged.

Divorcing couples often divide their joint credit card liabilities between them. However, if one spouse later declares bankruptcy, they can have their share of the debt discharged and the credit card company will look to the other spouse to pay the full debt. This risk might be minimized by the divorce agreement stating that the credit card debt is not dischargeable and this agreement is brought to the attention of the bankruptcy judge.

Sometimes, one spouse will buy out the other's interest in the home in exchange for payments to be made over time after the divorce. These payments could be discharged bybankruptcy and the spouse owed the money must protect him/herself by requiring the other spouse to provide a deed of trust or some other enforceable instrument as a further guarantee of payment.

The new bankruptcy rules have made child support payments the maximum priority debt that should be repaid by anyone seeking to file for bankruptcy. ------------------------------
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