Divorce and Bankruptcy

September 6, 2005

Will you really be able to start over after divorce? A new law that goes into effect October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act, will make it harder for people to file for bankruptcy, including those filing for a divorce.

Some argue this law will protect those receiving domestic support, such as alimony or child support, making it harder for the obligated to slip away from the money they owe by filing for bankruptcy.

Others say the new law is too harsh and that most people filing for bankruptcy face real problems, often divorce, a job loss, or family illness, and aren’t just trying to escape debt.

Domestic attorneys say the new law will make it harder for those divorcing to start over, even after the marriage ends. Divorce experts say bankruptcy and divorce go hand and hand; divorce causes bankruptcy and bankruptcy causes divorce.

Studies report that bankruptcies have been on the rise before the new law goes into effect and so have divorce rates, as people try and take advantage of the current, and friendlier, law.

Click here to read an article about this recently posted on Reuters.com.

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