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Divorce settlements are usually crafted with the best interest of both parties in mind. Sometimes though, what seems fair in the beginning turns out to cost everybody, especially when real estate and bankruptcy are involved.
People who accept property to supplement spousal support risk losing income. Spousal support can not be discharged in a bankruptcy, but property can. If a bankruptcy court deems the property split isn't fair, they can take back the property and use the proceeds to pay back creditors.
The best way to protect yourself from your ex's potential bankruptcy is to evaluate what your getting in the divorce. Negotiate for liquid or near liquid assets. Consider selling non-essential assets to create liquidity, and make sure all loans in both partners names are refinanced.
No plan is fool proof, but you can protect yourself from most obvious issues.
Source: www.businesswire.com
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