When your ex-spouse files for bankruptcy you must pay attention. First, if you are in the middle of your divorce, and it is not yet final, your community property is property of the bankruptcy estate. That means that you must act quickly and carefully to protect the equity in these assets.
Second, alimony, spousal support, child support, property division, and debt division all have different ramifications depending on whether the bankruptcy is under Chapter 7, 11, 12 or 13. Even seasoned bankruptcy attorneys will have to look up these rules to double check on how these issues can cause problems.
Third, you cannot proceed with anything but the SAPCR without bankruptcy court permission. Remember, the Constitution places Federal Courts above state Courts. When a federal court enters a stay order, that means stop. Don’t run afoul of a bankruptcy judge just be doing the logical thing in getting through a divorce.
Collaborative law, uncontested divorce, no-fault divorce are all phrases that make the divorce process seem user friendly. But, beware, the second a bankruptcy makes its way into the situation user friendliness has just been tossed out the window.
This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.