Family Law and Bankruptcy

The filing of a divorce is routinely followed by the filing of a bankruptcy. The non-filing spouse will usually have questions as to whether the filing spouse’s bankruptcy will have any impact on alimony, child visitation rights, or child support. The most common questions involving bankruptcy and family law are answered below:

Can a Divorced Couple file for Bankruptcy Jointly?
Joint spouses are allowed to file for bankruptcy together, thus saving on bankruptcy attorney costs and fees. Unfortunately once a divorce is final the divorced spouses must file for bankruptcy independently of each other. If spouses are currently going through a divorce, but have yet to be officially divorced they may be able to file jointly. When debtors file jointly they must both include their income and thus filing jointly may not allow debtors to quality for chapter 7 bankruptcy (based on their incomes), so it may be wise to file after the bankruptcy is officially finalized.

Can a Spouse avoid paying for Child Support and alimony by filing for Bankruptcy?
No,The Bankruptcy Code protects the rights of children and former spouses to collect support. Any support, whether it is called family support, alimony, or child support, is non-dischargeable in bankruptcy. The spouse who receives the support does not have to file any type of proofs of claims or objections to the Bankruptcy Court to enforce her rights to continue to receive support.

If One Spouse files for Bankruptcy, what happens to any Joint Credit Card Debt?
Bankruptcy eliminates the liability of the filing spouse’s debt when they file for bankruptcy. What this means is that on jointly liable debt, if one spouse files for bankruptcy and the other spouse does not file, then the credit card company will “go after” the spouse who did not file.

Can Divorce Lawyer Fees be Wiped Out or Discharged in a Bankruptcy?
It is not uncommon as part of the divorce settlement that the opposing spouse is required to pay the attorney costs for his or her ex-spouse. If the spouse required to pay the attorney fees files for bankruptcy, then are the attorney fee debts dischargeable? The key question is whether the counsel fee debt is declared as a support obligation or a property settlement claim.

Likely the divorce attorney, whose fees are listed in the bankruptcy petition will hire bankruptcy counsel to attempt to argue that the attorney fees were support obligations (and thus non-dischargeable) rather than a property settlement claim (dischargeable).

What will happen to an ex-spouse’s credit if the Other Spouse files for Bankruptcy?
Each spouse has his or her own credit report so the filing of one spouses bankruptcy will have no impact on the other spouse’s credit.

Will filing for Bankruptcy impact a Spouse’s Rights regarding Child Visitation and Custody?The filing of a bankruptcy will have no impact on a spouse’s rights regarding child visitation or custody.

Contact Shmucher Law, PL if you have questions regarding family law and bankruptcy and you would like to schedule a free consultation to determine if bankruptcy is an option for you. Shmucher Law, PL can be reached by calling either 305.741.5553 or 954.309.5559.

Shmucher Law, PL, a bankruptcy law firm, represents debtors, creditors, and trustees in bankruptcy matters throughout Broward and Miami-Dade counties.