Will a bankruptcy filing hold up my NJ divorce?

 

A:

Whenever a bankruptcy is filed, something called an automatic stay is imposed.  This protects the debtor in bankruptcy from creditors.  But what if the individual debtor is in the middle of a divorce?  What happens?

Well, that depends.  Bankruptcies seek to protect the debtor’s assets (called “assets of the estate”) from creditors while the debtor is in bankruptcy and, in most cases, after the case is over.  However, the law does allow for family law and divorce matters to continue during the bankruptcy itself, and does not prevent actions commenced:

• To establish paternity
• To establish or modify an order for alimony, child support, or some other domestic support obligation
• To determine child custody or visitation
• For the dissolution of marriage, except for the equitable distribution of marital property
• For domestic violence

Even matters already in progress can be continued for enforcement purposes, including:

• The collection of alimony, child support or some other domestic support obligation from property other than that of the bankrupt estate
• The withholding of income (such as through a wage attachment) for the collection of a domestic support obligation
• The withholding, suspension, or restriction of a driver’s license, professional or occupational license, or recreational license; or
• The interception of a tax refund

As a practical matter, the only issue that cannot be litigated during the pendency of a bankruptcy is the equitable distribution of marital assets.

No one case is the same, so if you are in the midst of a divorce, and you, your spouse, or both of you are considering bankruptcy, please call my office at 888-857-8418 or contact me through this site to discuss your situation in detail to be sure your rights are protected.

Related Topics

• What is an automatic stay in bankruptcy?
• What is a wage attachment in New Jersey?
• What is a domestic support obligation (DSO) in bankruptcy?

Getting divorced and thinking about bankruptcy? Is your spouse filing, and you are worried about what that might mean to your case?  Then get the answers to the most frequently asked questions by downloading my free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy. It will give you the answers you need all in one place. Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.