If you and your spouse decide to get a divorce, it's important to know that both your assets and your debt are considered marital property. If you live in an equitable distribution state, you'll get your share of both depending on what is deemed fair, while a community property state will divide everything in half. When there is significant marital debt and you know you aren't going to be able to pay it back, some careful planning may help you if you decide to declare bankruptcy. There's two types of debt, secured and unsecured. When your marriage has debt and you want to declare bankruptcy, you want to be responsible for as much of the unsecured debt that you can be.
If Your Home Goes to Foreclosure
When your home goes to foreclosure during a divorce, there's usually very little that can be done at this point. If you and your ex hold a mortgage on the home and the lender pushes it to foreclosure, they are taking the chance that all they will get from your home is money from selling the home. While you may be nervous about simply walking away, most lenders can't do much else to you except take the house through foreclosure. Any mortgage that remains is usually written off by the lender.
When You Have Credit Card Debt
If you have credit card debt, this is the debt you want to be responsible for in a divorce. This debt can be written off in a bankruptcy filing. Negotiate with your former spouse to get as much of the credit card and other unsecured debt that you can, even if it means taking more than what is deemed fair. You are going to write the debt off anyway, so it really doesn't matter. While your ex probably knows the same trick, they may not be in the same position to declare bankruptcy and aren't focused on this strategy.
When You Still Have Assets
Even if you were the stay at home mom and don't have a retirement account in your name, any retirement account that was funded by your ex during your marriage is an asset for both of you. While your ex may try to claim that this asset is in their name, and theirs, you have the right to receive your fair share of a retirement account.
As you go through your divorce, talk with an attorney that can guide you through this difficult process.