Crossover of Bankruptcy and Divorce in Boston
FEDERAL BANKRUPTCY AND DIVORCE IN MASSACHUSETTS
A bankruptcy proceeding is one in which a person files a petition in the federal courts seeking a discharge of debt. The filing of a bankruptcy petition automatically stays collection efforts against the assets of the debtor, including collection efforts in a pending state domestic relations proceeding.
In Boston, proceedings for alimony, maintenance or support from the continuing income and wages of the debtor are not automatically stayed. Of course, child support proceedings are not stayed either if a bankruptcy proceeding is initiated.
There are two main bankruptcy filings that relate to family law matters – the Chapter 7 and Chapter 13 cases. In a Chapter 7 case, the debtor’s assets are all included in a bankruptcy estate, and a trustee sells off assets to pay creditors. The debtor’s obligations are discharged unless they are exempt (i.e. student loans, spousal and child support obligations, etc.) Chapter 13 cases involve adjusting the debts of a person with income and attempts to repay all or part of debts. Typically a repayment plan over a period of years is ordered.
The common problem in divorce or separate support actions arises when a spouse to a divorce (while pending or after the divorce is final) files a bankruptcy petition. Imagine a situation where spouses owe money on a joint debt, but one spouse files bankruptcy. The law can become very complex in these situations.
Our Boston lawyers are family law experts that have dealt with these issues in the past. Ideally, if bankruptcy is filed or will be an issue affecting a spouse’s rights and obligations during or after a divorce or separate support action, that person should hire an effective family law attorney and a qualified bankruptcy attorney. We have offices in both Boston and New Bedford and represent residents of Bristol, Suffolk, Middlesex, and Plymouth counties.
Call our firm today to speak with our divorce and separate support lawyers. You can also send us an email.