Navigate:

When can a divorced spouse escape the obligations of a property settlement through bankruptcy?

By being legitimately bankrupt himself or herself. Prior to 1994, someone who declared bankruptcy could easily discharge a property settlement to a former spouse. Now the bankruptcy court is permitted to weigh the financial hardships between the debtor and the creditor. If the bankrupt has enough property, income, or other assets to pay the debt to the ex-spouse creditor, then the bankruptcy court will order the bankrupt to pay the debt. If the bankrupt literally does not have the money or assets to pay the debt, then it may be discharged, either in whole or in part.