Search Site
Menu
Bankruptcy During Divorce

Bankruptcy During Divorce

Problems may result from the conflict of interests between domestic relations courts and bankruptcy courts when a couple files for bankruptcy during a divorce. The conflict arises because of the differing policies between the courts. Bankruptcy courts have a policy of providing a fresh start and distributing the debtors’ assets equally among all of their creditors. Family courts have a policy of equitably dividing the property between the spouses.

 

Property Division Comes to Halt until Bankruptcy Proceedings are Complete

 

 

When a couple is in the process of a divorce and one or both spouses file for bankruptcy, then the property division aspects of a divorce proceeding stop until the bankruptcy proceedings are complete. This occurs because domestic relations actions generally fall within the broad language of the automatic stay provided upon the filing of a bankruptcy case. The divorce court can still award custody, visitation, child support, alimony, and even grant the divorce.

 

 

Characterization of Obligations

 

 

Courts must determine whether existing obligations constitute alimony or a property settlement. Many times divorce courts do not designate whether a particular marital debt represents a division of property, alimony, or a combination of the two. Federal bankruptcy courts separate debts that constitute property settlements from those that are maintenance, support, and alimony to determine which debts are dischargeable.

 

 

Dischargeable and Nondischargeable Debts Related to Divorce Proceedings

 

 

Bankruptcy courts may discharge certain debts related to property settlements. Property settlement debts are typically discharged but maintenance, support, or alimony debts are not typically discharged.

 

Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.

Videos
Our Attorneys
Client Reviews
  • google
    5.0/5.0

    Jeff Field and Associates have been fantastic. From Chris to Casey and also Jeff. Grateful for their guidance during this time!

    Read more

    Susan Tankersley

  • google
    5.0/5.0

    Jeff Fields and Associates are great bankruptcy attorneys.They made the process for me stress free, I would definitely recommend this firm❤️❤️❤️

    Read more

    Catira Smith

  • google
    5.0/5.0

    These guys, especially Laura, put in over and above to help finish my case!

    Read more

    Michelle Cheshire

  • google
    5.0/5.0

    Chris and Laura have been amazing! The process seamless! All of my questions and needs were addressed! I highly recommend this office for your BK needs!

    Read more

    Crystal Jackson

  • google
    5.0/5.0

    This is the best Bankruptcy Lawyers ever They treat you with respect and do not judge you for the mistakes you made.Mr.Sleeper and MS.Brown are the best they answered every question I had and if I couldn't reach them they always responded to my voice...

    Read more

    Mwells

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form