The economic downturn has made bankruptcy a reality for a lot of people. Lost jobs and ballooning mortgage payments have made it impossible for some people to keep their heads above water.
Not surprisingly, most family law attorneys have seen an increase in the number of clients, potential clients and opposing parties that have or will declare bankruptcy. So, it is important to have a basic understanding of how a bankruptcy filing can affect family law matters.
Procedurally, one spouse/parent’s bankruptcy filing often automatically stops (or “stays”) lawsuits against the person that files bankruptcy. Most importantly for family law cases, when one spouse files bankruptcy, the other spouse is barred from filing a lawsuit for property division (i.e. “equitable distribution”) until the conclusion of the bankruptcy case.
However, there is a long list of claims that the non-bankrupt spouse/parent can usually pursue in family court even after a bankruptcy filing. These claims are listed in the bankruptcy code as follows:
– Claims to establish paternity of a child
– Claims to establish or modify child support or spousal support
– Claims to establish or modify child custody orders
– Claims for an actual divorce (as long as property division is not also requested)
– Domestic Violence claims
– Lawsuits seeking to suspend the driver’s license, professional license, and/or recreational license for a spouse that has failed to pay required support obligations
– Reporting of overdue support payments to credit reporting agencies
– Interception of tax refunds to satisfy support obligations
– Enforcement of a medical obligation owed by the bankrupt spouse
You should contact a qualified family law attorney if your spouse, ex-spouse or your child’s other parent has filed bankruptcy and you want to pursue family related claims. Your attorney will help you navigate the potential land mines involved in these situations.
But, a bankruptcy filing does not have to stop you dead in your tracks. You can pursue many family law claims even after your spouse or ex-spouse files for bankruptcy.