Bankruptcy Attorney Joel E. Sannes offers this information on the question, “How Does My Bankruptcy Affect My Pending Divorce?”: Bankruptcy will not stop you from getting a divorce, but it does impact the division of marital property. The Bankruptcy Trustee has the right to investigate asset settlements to be sure the divorce is not being used to transfer money or property so that the trustee or creditors cannot get to it. If only one spouse of the married couple files for bankruptcy protection, and community property debt is involved, all non-exempt community property becomes part of the bankruptcy estate. This means that the court may take both parties’ interest in non-exempt community property to pay claims of creditors.
With that said, bankruptcy does not impede any portion of the divorce case (or other court case) that is to establish paternity, establish or modify child support or spousal maintenance, regarding child custody or visitation. Further, any party in interest can ask the bankruptcy court to lift the automatic stay to allow the divorce to proceed as if bankruptcy had never been filed.
Generally speaking, spousal maintenance and child support are never discharged or eliminated via bankruptcy. Further, property/debt settlement agreements or decrees regarding property/debt are exempted in Chapter 7. For example, if the decree orders that the husband will pay a certain debt and he files for Chapter 7.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding How Does My Bankruptcy Affect My Pending Divorce?, or any other Bankruptcy matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.