Some litigants try to use bankruptcy to avoid paying their matrimonial and child support obligations or as a way to delay the proceedings. Here is the 411 on what the impact of bankruptcy proceedings have on divorce and child support related matters.
Upon filing the bankruptcy, a debtor has an automatic stay which automatically stays other pending civil proceedings no matter where they are, even another state. Parties interested in lifting this stay will have to file a motion in the bankruptcy court to lift the stay.
Debtors in bankruptcy may try to discharge a debt. Chapter 13 proceedings may allow for the discharge of property settlements in a divorce but they will not allow for the discharge of child support payments. Other bankruptcy proceedings, such as Chapter 7 Liquidation and Chapter 11 Reorganization do not allow for the discharge of divorce property settlements.
A spouse or other parent may have to gain the approval of the bankruptcy trustee to allow their settlements in a divorce or child support proceedings to be approved by the Court. Generally the bankruptcy court will not get involved in the specifics of domestic relations proceedings. Property settlements may pose a challenge if the spouses are not earnestly getting a divorce and are trying to take money from other creditors, for example if they still continue living together as if married.
If you are concerned that your spouse or child’s parent may be filing bankruptcy to avoid paying you what is owed , contact Diana Mohyi Attorney at Law for a consultation.