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Frequently Asked Family Law Questions:
Do mediators interview children? Do mediators recommend counseling? What is the difference between legal custody and physical custody?
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| Law Offices of Robert G. McCoy and Associates,
P.C. Serving Riverside and San Bernardino Counties 909-467-1169 |
When a bankruptcy petition is filed, an "automatic stay" is issued. When a divorce petition is filed, an automatic "injunction" is issued. When both a bankruptcy and divorce petition are filed, both a stay and injunction are issued. The bankruptcy stay does not halt child support or child custody proceedings, but may halt certain types of collection efforts to enforce support. Permission may need to be obtained from the bankruptcy judge to employ certain types of collection efforts used to collect support. Also, the family law court may not divide assets or debts until the bankruptcy case is closed or until the permission of the bankruptcy court is obtained. The bankruptcy stay does not prevent the filing of a Petition for divorce, and does not preclude the family court from entering a status judgment of divorce. Likewise, the divorce injunction does not prohibit any party from filing for bankruptcy.
2. The discharge issue.
A bankruptcy discharge in a Chapter 7 case will not discharge any debts distributed in a divorce decree. However, a Chapter 13 case will discharge such debts. If a Chapter 7 bankruptcy discharge is granted as to one spouse before a divorce decree is issued, then there is a legal question whether the Family Court judge has the authority to redistribute the discharged debts to the spouse who obtained the bankruptcy discharge.
3. A divorce during a Chapter 13.
If a husband and wife file a Chapter 13 bankruptcy, they are jointly obligated to make all plan payments for the entire duration of the plan, even if they separate or get divorced. or the bankruptcy will be dismissed, However, as a practical matter, it may be difficult or impossible for one or both parties to continue to meet the current plan obligations, and one or both parties, now that they are separated, may qualify for Chapter 7. So, it might be in the best interests of the debtors to voluntarily dismiss the case and refile, separately. They would each have to hire a different attorney for this purpose as their prior bankruptcy attorney would now have a conflict of interest. Interestingly, a Family Court State judge probably does not have the authority to tell each party how much or even whether he or she should pay anything into the Chapter 13 plan. However, Family Court State judges do have the authority under California law to award spousal support as a set off due to the filing of a bankruptcy of one or either party. For example,, if a non-dischargeable debt like taxes is being paid through a Chapter 13 plan and the case is dismissed and the husband refiles a Chapter 13 and the wife refiles a Chapter 7, the Family Court may award less or no spousal support to the wife to offset for the taxes that the husband is paying for the wife through his bankruptcy plan..
The Law Office of Robert McCoy has been practicing family law for over 18 years, and has handled several complex cases involving multiple businesses, properties and interstate issues. The Law Office handles bankruptcy-divorce crossovers, and Robert McCoy is a recognized expert in these types of cases. Robert McCoy is an instructor for Sterling Education Services and teaches other attorneys how to handle divorce-bankruptcy cross-overs.
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Frequently Asked Family Law Questions:
Do mediators interview children? Do mediators recommend counseling? What is the difference between legal custody and physical custody?
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