Can a Bankruptcy Filing Be Dismissed If It Was Made During a Divorce?

by Teo Spengler
The bankruptcy court can penalize those who file or dismiss cases without good cause.

The bankruptcy court can penalize those who file or dismiss cases without good cause.

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Sometimes divorcing spouses find themselves in divorce court and bankruptcy court at the same time. Both spouses may file for bankruptcy, but sometimes one spouse uses a bankruptcy filing to stall the divorce case. A bankruptcy case filed by a divorcing spouse can be dismissed by the court on its own initiative or at the request of either spouse.

Filing for Bankruptcy

People can legitimately file a bankruptcy petition to eliminate debt or to reorganize their finances. A divorcing couple with credit card and medical bills may choose to declare bankruptcy so that the debt will not get divided up in the divorce. This simplifies the property division issues.

Court Dismissal

The bankruptcy court can dismiss your petition whether or not you are in divorce court. Your case might be dismissed for procedural reasons like failure to fill in the required documents appropriately; it can also be dismissed if the court determines that you filed for improper purposes.

Spouse's Request

If you file for bankruptcy, the filing essentially throws the brakes on your divorce case because of the application of the automatic stay, insulating you from lawsuits. However, it may not be to your advantage to use this as a stalling tactic. if your spouse asks that the bankruptcy court lift the stay and allow the divorce to proceed, the court is likely to do so.