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Divorce and Bankruptcy Archives


WHAT HAPPENS TO CHILD SUPPORT OBLIGATIONS IN BANKRUPTCY?If you are paying for child support and considering filing for bankruptcy you may want to know how a bankruptcy will affect your child support responsibilities.  On the other hand, if you are currently receiving child support, and the parent who is paying files bankruptcy, you may be wondering if they are still obligated to pay. Below is a general discussion of what happens to child support debt in a bankruptcy.


Depositphotos_49104165_m-2015.jpg    If you and your spouse can be amicable and work together on a joint bankruptcy filing, it can be beneficial for both of you.  There are many benefits for a married couple who are contemplating both divorce and bankruptcy to file a joint bankruptcy prior to filing for divorce.  This option should only be considered when it is appropriate to wait for a divorce filing. Depending on your circumstances, filing a joint bankruptcy petition with your spouse before a divorce can help to ensure your financial welfare going forward.  These are some of the reasons why you may want to file for bankruptcy before filing for divorce.


5 FACTORS TO CONSIDER IN DECIDING WHETHER TO FILE BANKRUPTCY BEFORE DIVORCE Bankruptcy and divorce are two of life's most upsetting challenges and are often intertwined.  Financial stress may be a factor in the decision to get divorced.  Divorce itself may cause financial stress.  We are often asked by people headed for both bankruptcy and divorce which should come first?  Read on to learn more about what to consider when deciding which you should file first: bankruptcy or divorce?

Do Married Couples Have to File for Bankruptcy Together?

Divorce & Bankruptcy It is a common misconception that if one spouse files for bankruptcy, the other must also file.  This is not correct.  One spouse is permitted to file without the other.  However, in most cases the income of both spouse's incomes is counted toward eligibility for a Chapter 7 bankruptcy that requires a "means test" to qualify. Furthermore, if only one spouse files bankruptcy, the non-filing spouse is still on the hook for his or her own debts as well as any joint debts.      Another common misconception is that if one spouse files for bankruptcy, the credit of the other spouse will be adversely affected by that filing.  It is not the filing of the bankruptcy or the discharge of debts that adversely affects a non-filing spouse's credit. It is the nonpayment of joint debts and other obligations that could affect their credit. If all debts in the non-filing spouse's names are timely paid, that spouse's credit should not be adversely impacted by the bankruptcy of their spouse.

On the Verge of Bankruptcy & Divorce: Filing with a Strategy in Mind

on the verge of.jpgAs most will attest, marriage and money can be a complex combination. When you got married, you and your spouse likely merged finances with a positive outlook, looking forward to all the benefits of a strong partnership. As the years pass though, there are inevitable challenges which must be weathered together-and finances are often connected to them in one way or another.

What Happens to Child Support Payments in Bankruptcy?

If you are feeling overwhelmed by the child support or alimony payments you have been ordered to pay and are considering filing a Chapter 7 or Chapter 13 bankruptcy, it is important to understand that family support payments are considered non-dischargeable debts in bankruptcy. This means that you cannot eliminate your obligation to pay them in your bankruptcy filing.

Divorce, Bankruptcy & How to Time it Correctly

If you are facing divorce and considering filing a Chapter 7 or Chapter 13 case, you may be wondering "when is the best time for me to file my bankruptcy case?" The answer is that it depends on your individual circumstances. Below is some general guidance, but it is important to contact us as soon as possible to discuss your options.

Which Comes First - Bankruptcy or Marriage?

If you are planning to get married but you have burdensome debt, it is important to consider whether you should eliminate your debt before you get married. Of course, you should openly discuss your finances with your fiancé, but you should also seek the advice and guidance of a bankruptcy lawyer. Why is timing your bankruptcy and your wedding day important? When you file a Chapter 7 or Chapter 13, you can eliminate the majority of your debt, allowing you to start your life as a married couple with a fresh financial start. You can remove your liability to pay credit card bills, medical bills and many other types of debt.

Bankruptcy & Enforcing Child Support Payments

What happens if you have custody of your children and you learn that your ex-spouse is filing for Chapter 7 or Chapter 13 bankruptcy? You are probably concerned about the impact the bankruptcy filing will have on your child support payments. Fortunately, the law provides protection for children and provides that child support payments are not dischargeable in bankruptcy. For most debts, the automatic stay bars any collection activity as soon as the bankruptcy case is filed. However, there are a few exceptions to the stay including actions to modify alimony or child support obligations. This means that if you are pursuing this type of action against your ex-spouse, it is not prohibited by the automatic stay. Pursuant to 11 U.S.C. §507, alimony and child support payments are given a high priority over other debts. A non-custodial parent cannot avoid his or her obligation to support his or her child by filing for bankruptcy protection. In fact, if the full amount of child support is not paid in full as part of the bankruptcy disbursement, the remaining amount must still be paid by the debtor.  Even child support payments that are past due are not discharged. It is also important to note that your ex-spouse's bankruptcy filing can be helpful if you believe he or she was not completely honest with you regarding finances. When an individual files for bankruptcy, he or she must make full financial disclosure of assets, debts, income and expenses. If you have questions regarding the bankruptcy process and how it could benefit you, contact Levitt & Slafkes today! If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, PC, at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.    

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