Bankruptcy and Divorce Issues in Ventura County
At the Law Office of Jacqueline Y. Blade, our experience with both divorce and bankruptcy allows us to deliver comprehensive advice and client service for individuals and couples whose financial and marital problems are interrelated. If a divorce is underway or likely to be filed soon, we will only be able to represent one of the spouses.
In bankruptcy, however, we often file a joint Chapter 7 or Chapter 13 petition for a couple interested in reducing and simplifying their indebtedness before they get divorced. Contact our office in Westlake Village for an experienced attorney's advice about your options in Ventura County and West Los Angeles.
Understanding the Consequences of Bankruptcy Before Divorce
Bankruptcy prior to dissolution of marriage will significantly alter the debt profile of each spouse as well as put into focus the extent of the marital community estate. The specific consequences, however, will depend a great deal on the particulars of each situation.
If only one spouse files for bankruptcy relief before divorce, all of the dischargeable community debts will be discharged as to that debtor. Liability for the undischarged portion of marital debts will still need to be divided between the spouses as part of a property settlement in their later divorce.
Marriage dissolution proceedings are generally exempt from the automatic stay. However, this exemption does not extend to adjudication of the parties' property division if that property is part of the bankruptcy estate. The bankruptcy estate includes the interest of both the debtor and non-debtor spouse in all property not yet divided by the family law court. If the nonbankrupt spouse wishes to overcome the automatic stay with respect to property division, he or she must file a motion with the bankruptcy court requesting relief from the automatic stay "for cause."
Only under unusual circumstances will a bankruptcy filed before or during a divorce interrupt the family court proceeding for more than six or eight weeks, but sometimes the spouse seeking the divorce will agree to wait a few more months for a Chapter 7 case to finish before starting or resuming the divorce.
Bankruptcy judges are generally reluctant to allow a bankruptcy case to interfere with the operation of California divorce and family law, and the Bankruptcy Code itself reflects a certain deference to matters of state law in these areas. For example, while a divorce case itself will be held up by the filing of a bankruptcy petition, obligations for child support or spousal support are not even covered by the automatic stay. In other words, filing for bankruptcy during or after a divorce is ineffective to avoid or alter the basic financial commitments that divorce will typically generate between spouses or parents.
Filing for Bankruptcy After the Divorce Is Final
In many cases, divorcing spouses encounter severe financial strains after they have established separate households and dealt with the expenses of divorce. One or both spouses may turn to bankruptcy in order to manage these stresses.
Joint bankruptcy is no longer possible after divorce, but an individual Chapter 7 or Chapter 13 case can help you deal with your share of the marital indebtedness, mortgage problems or such debt problems as student loans or taxes that have gone into default. Keep in mind, however, that bankruptcy can accomplish little to relieve the burden of child support or alimony payments. A motion to modify these obligations in family court will usually give you a better chance for relief.
Call 805-496-2311 in Ventura County or 818-495-4908 in West Los Angeles
To learn more about your options for dealing with debt problems affected or aggravated by divorce, or the most effective strategies for protecting your financial interests in a divorce affected by debt problems or bankruptcy, contact a knowledgeable lawyer at the Law Office of Jacqueline Y. Blade in Westlake Village.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.