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Bankruptcy and Divorce

Divorce and bankruptcy are frequent companions. Everyone knows someone whose marriage has fallen apart because of financial troubles. Most divorce lawyers are not experts in bankruptcy. Fewer bankruptcy lawyers know anything about divorce.

Fortunately for you, Lakelaw’s bankruptcy attorneys are considered authorities on the relationship between bankruptcy and divorce.

When searching for a bankruptcy lawyer who knows about divorce, consider David Leibowitz at Lakelaw, a Chicago bankruptcy lawyer and Milwaukee bankruptcy attorney. Why consider David?

For years, David Leibowitz has been selected by the Illinois Institute of Continuing Legal Education to write and lecture about the financial and property aspects of dissolutions actions. The table of contents of this work is available here.

Frequently asked questions about bankruptcy and divorce

Should I file my bankruptcy case with my spouse or separately?

Unfortunately, there is no pat answer to this question. Each case and situation is different. However, remember that even though you and your estranged spouse have different interests in the divorce case, you may have similar financial interests as to your creditors. It could be to the interests of both of you to resolve your financial issues before you finalize your divorce. Discuss this with your matrimonial lawyer. You will have to waive any conflict between each other for Lakelaw to represent both of you.

What happens to the means test in divorce?

Frequently, higher income people will overcome the presumption of abuse when facing divorce. That’s because two households cost more to maintain. One of the spouses will have to start paying child support or maintenance. Another of the spouses might have to start paying expenses for child care. As a result, many people who otherwise would be forced to file chapter 13 bankruptcy might not have to do so in the case of divorce.

What happens to my obligations to pay divorce related claims in bankruptcy?

You still have to pay alimony, maintenance and other domestic support obligations even if you file a bankruptcy case. These are not discharged in bankruptcy. Any other divorce related claim cannot be discharged in chapter 7 bankruptcy. However, such claims could be discharged in chapter 13.

What kind of a divorce related claim can be discharged in chapter 13 bankruptcy?

Types of claims which might be discharged in chapter 13 bankruptcy include property settlements or agreements to indemnify a former spouse against a debt, such as a credit card debt.

Are attorneys’ fees to my divorce lawyer dischargeable in bankruptcy?

Yes. However attorneys’ fees to your spouse’s divorce lawyer might not be since these could be considered “domestic support obligations.”

Can I file bankruptcy separately from my husband? Can I file bankruptcy separately from my wife?

Yes, there is no requirement that people file bankruptcy together as a couple even if they are married. In fact, if you are getting divorce, your estranged spouse’s income won’t be included with yours if you maintain separate households. It is possible that you would be considered to be maintaining the same household even if you still live in the same house.

What happens to my divorce case while I am in bankruptcy?

Many aspects of your divorce case will continue even if you have filed a bankruptcy case. The bankruptcy court will have to give permission to the divorce court to deal with various aspects of your divorce case relating to property since your bankruptcy case takes precedence for most property rights. On the other hand, issues like child custody, maintenance, the divorce status itself and family law rights are exclusively for the divorce court to decide. The divorce court also decides the issue of equitable apportionment of property.

Remember, the experienced and able bankruptcy lawyers at Lakelaw literally wrote the book on Bankruptcy and Divorce. Not only that, Jonathan Brand has taken substantial training in the field of collaborative divorce even though he is a full time bankruptcy attorney. We speak the language of divorce law fluently with our matrimonial law colleagues – all so we can serve you better. Call David Leibowitz or Jonathan Brand at Lakelaw at 312 360 1501 when thinking of bankruptcy and divorce.