Sign In

Taking a Closer Look at Bankruptcy Law and Divorce

Last updated 2 years ago

The areas of bankruptcy and divorce law may seem like completely separate parts of the legal code. However, many couples choose to utilize bankruptcy in conjunction with a divorce proceeding to discharge old debts and get a clean financial start after the dissolution of their marriage. In 2005, changes to the U.S. Bankruptcy Code affected these intertwined areas of the law. Here is a closer look at how bankruptcy and divorce law affect one another.

Looking at Domestic Support Obligations

A major tenant to remember about the intersection of bankruptcy and divorce is that you can never get out of paying child support or alimony. The bankruptcy code refers to these as “domestic support obligations,” and these financial obligations include money owed to a spouse, former spouse, child of the debtor, or a governmental unit such as a state collection bureau. The priority of the domestic support money has moved up in the bankruptcy priority list, meaning that family claimants get paid before all other unsecured creditors. Additionally, the 2005 changes allow a bankruptcy trustee to liquidate previously exempt property for the benefit of domestic support claimants.

Effects on You and Your Family

The 2005 amendments to the bankruptcy code primarily affect families and individuals who carry domestic support obligations or utilize the automatic foreclosure stay to keep their home. For instance, any property settlements received during divorce cannot be discharged with bankruptcy just because you legally received an overdue unsecured loan from your spouse. Similarly, an automatic stay granted to protect your home from foreclosure would be lifted if the house needs to be split between two spouses.

The best way to deal with the intersection of bankruptcy and family law is to hire a skilled family attorney. St. Louis area residents who need legal advice should contact the legal team at Dixon & Johnston, P.C. by calling (618) 233-1103. We can leverage our decades of experience to help you whether the divorce and bankruptcy processes.

Disclaimer:

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

  • Loading comments... Spinner


  • Hours:

  • 9:00 AM to 5:00 PM Monday
  • 9:00 AM to 5:00 PM Tuesday
  • 9:00 AM to 5:00 PM Wednesday
  • 9:00 AM to 5:00 PM Thursday
  • 9:00 AM to 5:00 PM Friday


Links

  • Recent Posts
    • Loading posts... Spinner
  • View All
  • Recent Comments
    • Loading comments... Spinner
  • Related Links
  • Popular Tags
    • Loading tags... Spinner