Divorce and the Effect of Filing a Petition for Bankrupcty by One Spouse

At the Law Office of David P Schwarz we are experienced litigators involving Orange County Bankruptcy actions by the debtor spouse we have protected many of our clients assets from bankruptcy court. Please contact our office at 949 735 9266 or via the web for a consultation. We can also be reached by email at dpslaw66@gmail.com.

The first issue a Divorce lawyer will inform his or her client of is the Automatic stay of proceedings against debtor. The bankruptcy Court as in the appellate Court will place an automatic stay on the proceedings. That means that any litigation that is going in trial court with your divorce has to stop. However, not all issues are stayed but property issues are stayed.

Once the petition for bankruptcy has been filed the debtor spouse must notify the divorce court about the automatic stay that is issued by the bankruptcy court. If the debtor spouse fails to notify the divorce court they can suffer penalties later on.

In addition, the Divorce attorney will inform you that there are some actions whereby the bankruptcy court will not provide an automatic stay. The law state there must be “good cause” in order to lift the stay. In addition, once the discharge of the bankruptcy results there is no stay.

An orange county bankruptcy court provides protection to a party going through a divorce and is suffering financial strain do to divorce proceedings.

The federal bankruptcy court takes over the course of action of any legal proceeding. The divorce court cannot proceed on any matter regarding financial issues.

As powerful as the bankruptcy action can be by putting an automatic stay on the divorce proceeding it does not work completely on the divorce on several issues.

The bankruptcy proceedings cannot stay “domestic support obligations” according to the bankruptcy code. These support obligations are alimony, separate maintenance or support including governmental assistance.

At the Law office of David P Schwarz we will argue for our clients to set aside an automatic stay that is not legally binding. This occurs if there is a spousal or child support obligation that is in collections. At this point the bankruptcy court cannot jump in and stay the divorce proceedings to benefit the debtor spouse is obligated to pay their support debt]

A Divorce lawyer will protect a client who is seeking to collect child support or spousal support. However, the collection effort can only be sought after property post bankruptcy filing and not before

Finally the retirement of a debtor spouse such as ERISA is not protected by bankruptcy therefore the other spouse can attach any income they are legally able to get without any bankruptcy interference.

At the Law Office of David P Schwarz we have dealt with many Orange County divorce proceedings where one spouse files for bankruptcy and seeks protection from any collection activity of the other spouse or creditors. Please contact us at 949 735 9266 or via the web for a consultation. We can also be reached by email at dpslaw66@gmail.com.

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