Joint Bankruptcy Filing and Divorce
Many people start a bankruptcy with a spouse. This of course is a joint filing, but you find that throughout the process you find that you both can’t live with each other any longer. You file for divorce and find that it is way more complicated than you think. You have been in your bankruptcy for at least two to three years and find there are many different things that need to be taken care of prior to you actually being able to file for your divorce. You have to keep in mind that there are steps that you must take in your bankruptcy to have your divorce final. In order for you to finish your divorce, you must have a motion filed with the courts to lift the protection that you have under the bankruptcy. This is called a motion to lift the automatic stay. Depending on whom you talk to, your divorce attorney or your bankruptcy attorney can file this motion. My belief is, if you are retaining a divorce attorney, then they should be the one’s to file the motion on your behalf. That is why you retained them, is to help you get through your divorce. Our office, however, will file the motion on your behalf for attorney fees.
The process is that the motion has to be set on the Judge’s docket and approved by the Judge. As long as it is an agreed divorce then there will not be a problem with the Judge signing the order and granting the divorce. Now that you have the permission to get the divorce, what do you do with your bankruptcy? This is a great question that comes up more times than not. If you and your ex-spouse have an agreement to split the bankruptcy payment, then that is great. You will make your payment to the trustee and she will make her half of her payment to the trustee. What do I do if she doesn’t make her half? Well you are stuck. If you want to complete the bankruptcy successfully, then you must make the full payment if she is not willing or just can’t make the trustee payment. Yes this is not fair, but the bankruptcy judge is not going to twist her arm to make those payments. There are a couple of options that you can keep in mind when you have all of these thoughts going through your head.
Now that you are divorced and your ex-spouse is not making her half of the payments and you know that you can’t force her too, the options you have are: make the payments, talk to her and see if she will be willing to severe the case, or dismiss this case and re-file on your own. I have found a few couples that go through this process and they have had the problem with one of the spouses not making payments. They feel that it is not fair that they make the payments and that the other half gets to benefit from them paying the bankruptcy off. So they decide to dismiss their case and re-file. This is fine and all, because now the other half is not going to benefit from receiving a relief as they were hoping. You shouldn’t care any more because you are no longer married. Downfall is that it will show on your credit as two bankruptcies, one that failed and one that was successful.
You could talk to your ex-spouse to see if she would be willing to severe the case. This would benefit you, because you could keep the same case number, she would get a different case number, and she would have to either continue making payments in a Chapter 13 or she could convert her case to a chapter 7. This would be beneficial if you can get both parties to agree, but many times you run into the problem with one spouse who will not agree to the case being severed. If your spouse will not agree to severe the case, you will now decide to re-file on your own or continue paying as originally agreed upon. You are now going to be in a position to decide whether or not you want to continue to pay for this person’s debt when they refuse to pay for the debt. When you think that it is over, it is just beginning.
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