Can Bankruptcy Be Used to Stop Divorce Proceedings?

By Rob Jennings J.D.

If you want your divorce to be over as quickly as possible, you may want to wait until your divorce is final before filing for bankruptcy. While filing bankruptcy will not stop divorce proceedings, the automatic stay, which stops almost all lawsuits against the filing debtor, may hinder your ability to get through a property settlement.

Automatic Stay

An automatic stay occurs immediately when a person files bankruptcy, and while it may stall a divorce, it will not stop it. The automatic stay prevents almost all lawsuits and collection efforts against a debtor unless the bankruptcy court grants a motion to “lift the stay”. However, the stay does not stop the court from establishing paternity, establishing or modifying alimony or child support, or collecting past due support from any property that is not part of the bankruptcy estate. Therefore, the divorce court can collect from wages or assets earned or received after the Chapter 7 is filed. Once the court enters a discharge order, the automatic stay is lifted and the case may proceed.

Child Support and Alimony

Filing bankruptcy does not stop any actions for the establishment or modification of an order of alimony or child support. The divorce court can also collect alimony or child support from any property that is not property of the bankruptcy estate. Filing bankruptcy can actually hurt you in an alimony case; if you're a supporting spouse, discharging your debts leaves you with more income to pay alimony. If you're a dependent spouse, bankruptcy reduces your need.

Divorce is never easy, but we can help. Learn More

Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy case, the automatic stay remains in place for the entire Chapter 13 repayment period. However, once the payment plan is confirmed, all property is again subject to collection for alimony and child support orders. Property that isn't part of the bankruptcy estate is subject to actions to enforce alimony and child support. Also, if you wait to file Chapter 13 until after the divorce is finalized, you might be able to discharge some divorce-related debt, such as credit card debt. However, if the court assigned marital debt to you in the divorce decree -- or you agreed to take on joint debt as part of a marital settlement agreement -- your spouse may sue you for reimbursement if you later discharge those debts in bankruptcy, causing creditors to come after her for repayment because they can no longer come after you.

Chapter 7 Bankruptcy

In a Chapter 7 case, which involves the liquidation of assets, the divorce court can collect past due family support from the wages or assets earned or received after the Chapter 7 is filed. Once the debt is discharged, however -- which typically takes three to five months -- the automatic stay is lifted and all parts of the divorce proceed normally. Unlike with Chapter 13, you can't discharge divorce-related debts in Chapter 7.

Divorce is never easy, but we can help. Learn More
What Happens When You Reaffirm a Vehicle After Bankruptcy?

References

Related articles

Florida Bankruptcy Laws and Civil Judgment

Most debt resulting from civil judgments -- such as judgments relating to consumer and business debt -- can be discharged when you file for bankruptcy in Florida. There are some exceptions, but those are mainly limited to judgments for fraud, domestic support obligations or intentional acts.

Does Filing Bankruptcy Excuse You From Court Ordered Divorce Fees?

The financial pressures attendant to a divorce case can place enormous strain on a person's budget. Increasing expenses without increasing income can drive even the most financially responsible party to the brink of bankruptcy, but being ordered to pay the other side's court costs and legal fees can push him over. You can sometimes discharge court-ordered fees from divorce cases, but the specifics vary from case to case. Consult an attorney before making any decisions.

Bankruptcy Fraud Penalties

Generally, fraud is dishonesty in some form, which is done with the intent that others rely on it so that you gain an advantage for yourself or cause a disadvantage to someone else. Since bankruptcy is intended to provide relief to the honest debtor and treat creditors as fairly as possible under the circumstances, bankruptcy fraud by any party involved in the process is taken very seriously. There are several penalties that can be applied.

Get Divorced Online

Related articles

How to Benefit From a Trust in Bankruptcy

If you learn you're the beneficiary of a trust soon after you file for bankruptcy protection, it may be too late to ...

Rules for Chapter 7 Bankruptcy & Inheritance

The law is full of loopholes, and nowhere is this more true than in the area of bankruptcy statutes. The U.S. ...

Bankruptcy Treatment of Default Judgments

If you've filed for bankruptcy protection, you benefit from an automatic stay of collections by your creditors. This ...

Can My Ex Sue Me for Back Alimony After I Filed Bankruptcy?

Although bankruptcy can provide you with a fresh start, not all debts are dischargeable. Past-due alimony, or spousal ...

Browse by category
Ready to Begin? GET STARTED