973 377-2066

2 Ridgedale Avenue, Suite 202, Cedar Knolls, NJ, 07927

NJ Guide to Bankruptcy and Divorce

Related Practice Areas

Aug 6, 2021

NJ Guide to Bankruptcy and Divorce

Bankruptcy and Divorce in New Jersey

Divorce is one of the most stressful experiences a person is likely ever to experience. Aside from the emotional trauma it can inflict on both parties; it also takes a toll on many other areas of their lives. But, of course, one of the most profound ways a divorce can affect both of the parties involved is financial.

There are often financial obligations legally put in place after a divorce. For this reason, bankruptcy and divorce are often mentioned in the same sentence and entwined together in many different situations. So if you’re a New Jersey resident who’s recently gotten a divorce and you’re considering filing for bankruptcy, read on for everything you need to know.

Does Bankruptcy Override Divorce?

Many people who have gone through divorces and cannot bear the financial burden find themselves contemplating filing for bankruptcy. But will doing this help to clear some of your divorce-related debts and financial obligations? In some cases, yes.

How much filing for bankruptcy will help in such a situation will depend on the type of bankruptcy you wish to file. There are two main types you may file in this situation.

Chapter 7

To file for Chapter 7 bankruptcy, you must first determine your eligibility by assessing your financial history. If you’ve been deemed suitable, this type of bankruptcy, also known as liquidation bankruptcy, will cancel certain types of debts but not others.

Chapter 7 provides you with a discharge that cancels unsecured debts. However, Chapter 7 doesn’t cover any divorce-based debts you may have. In the state of New Jersey, the filing fee for a Chapter 7 bankruptcy is $335.

Chapter 13

Chapter 13 bankruptcy can offer recipients something called a super discharge. This covers different debts that Chapter 7 typically does not. With Chapter 13, it is possible to discharge some obligations arising out of a divorce decree.

You should note that neither Chapter 7 nor Chapter 13 has the power to discharge any child support or spousal support payments you may have. However, if behind on either of these payments, Chapter 13 allows you to catch up on your obligation for up to five years. In the state of New Jersey, the filing fee for a Chapter 13 bankruptcy is $310.

What Comes First Divorce or Bankruptcy?

In some cases, one or both parties may decide to file for bankruptcy after separating but before the divorce. To divorce, a couple must have experienced irreconcilable differences for six months and lived in New Jersey for the past 12 months.

Filing for bankruptcy before a divorce has the potential advantage of canceling joint debts that would otherwise be divided up as part of divorce proceedings. It can also streamline the divorce process and, in some cases, allow the parties to keep more assets than they otherwise would have.

Does Bankruptcy Clear Tax Debt?

Bankruptcy can clear tax debt in certain specific cases. However, even if you meet the eligibility requirements, certain kinds of tax debt can’t be discharged through bankruptcy. For example, if you are a business owner and owe payroll taxes or if the IRS has a tax lien on your property, these may not be eligible for discharge.

Bankruptcy and Divorce: Complex Legal Quandaries

Both bankruptcy and divorce represent significant personal, financial, and legal challenges to those affected. If you’re currently going through a divorce and need legal advice, at Dalena & Bosch we have years of experience in this area. Get in touch today to see how we can help.

If you would like more information on divorce take a look at our Blog. There you will find a wide array of divorce topics to help you with your individual circumstances.



Elizabeth Dalena helped me through a very difficult divorce and I felt working with her was like working with a friend you can trust! Beth, thank you for your professionalism and helping me through this difficult time.
Michael Mastrogiacomo - March 2020
If you’ve been searching for an honest and empathetic attorney...someone you can trust while you navigate the difficult and emotional world of family law, then do yourself a favor and contact Beth Dalena & Jessica Bosch. You’ll be so glad you did.
Par 5 Consulting - March 2020
When you are in the painful and often frightening process of divorce, the women of this law firm bring you confidence and security with their knowledge and professionalism. They exhibit that rare combination of the willingness to hold your hand like a compassionate friend and defend you like a piranha in the courtroom when necessary. They exhibit dedication, and the grace and wisdom of their long term experience. They look…
Cindy Morhouse - February 2020
These ladies have helped me several times in my experience with them. Jessica was my divorce attorney and I can say without hesitation, she was professionally and personally a gift to me. She handled my case (adversarial at best) with grace and knowledge. A fighter when necessary. She handled me in my personal state as a friend. Compassionate and kind. Beth assisted me with rewriting my deed after my divorce…
Scarlett O - January 2020
I chose Jessica A. Bosch to represent me because she was compassionate and knowledgeable. My divorce was a long and difficult journey. During this time, I lost sight of what was really important. Jessica kept me grounded and focused on what would be best for me after the divorce. I am grateful for her help in protecting two very important financial things that I might have given up. I didn't…
Cynthia R - December 2019