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Filing Bankruptcy During a Divorce

If one party files for bankruptcy while a divorce case is pending, it can complicate matters. Your filing can cause delays in the divorce proceedings, which typically frustrates your spouse and causes emotions to run high during an already difficult time.

Certain aspects of your divorce case can proceed while your bankruptcy case is open, such as child support, alimony, custody and visitation.  However, the automatic stay may prevent the division of the marital assets until the bankruptcy case is over or the bankruptcy court gives permission to continue the division of the assets.

Your bankruptcy trustee may want to intervene in your divorce case to ensure that the property division is fair, which can make the process more complex and expensive. However, if there are few assets to be administered by the bankruptcy estate, a mid-divorce bankruptcy filing may have little effect.

Filing Bankruptcy After a Divorce

    When considering bankruptcy and divorce, it may not make sense to jointly file before the divorce.  The most obvious reason would be if your divorce is not amicable and/or you suspect that your spouse may be hiding assets.

    When you file a personal bankruptcy immediately after your divorce is final, the trustee may scrutinize your marital settlement agreement to determine if the property division was equitable. If the trustee believes that the asset division is not reasonable, your bankruptcy trustee may file an avoidance action. However, this is not a common occurrence because trustees understand how financially damaging divorce can be.

We Can Help: Contact Our Experienced Bankruptcy Lawyers:  Both divorce and bankruptcy can be very emotionally difficult situations to deal with.  We are here to help.  Our experienced bankruptcy attorneys at Levitt and Slafkes, P.C. can walk you through the steps of bankruptcy filing after divorce and explain how it impacts your particular situation.  Call us at 973-323-2953, or contact us online to schedule a free consultation.

We are proudly designated as a debt relief agency by an Act of Congress.  We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years.

We’ve also created a Free E-book, Bankruptcy and Divorce… Which Should Come First? Please feel free to download your copy here