Divorce & Bankruptcy Lawyer in Salt Lake City
Guiding Clients through the Most Complex Legal Situations
One of the principal bankruptcy issues in a divorce case is whether an award in a divorce decree is characterized as alimony or support of the non-debtor spouse or a property award. When a debtor petitions for bankruptcy relief, all debts owed to a spouse or former spouse which are not domestic support obligations (alimony or child support) are not discharged by bankruptcy, and the obligations survive bankruptcy.
Court Tries to Balance
Additionally, the divorce court is free to do what is fair in the divorce proceeding by balancing things out. For example, if a debtor discharged his or her obligation relating to $100,000 of marital debt, thus obligating the other spouse exclusively to pay those obligations, the divorce court could award more property, alimony, or take other balancing measures to the non-debtor spouse so that both parties had the same amount of debt and/or property.
Support Obligation or Property Settlement
Whether a debt is considered to be a support obligation or a property settlement is a question of federal law. Generally, federal courts liberally interpret a divorce decree award to be a non-dischargeable support obligation. However, labels are not necessarily binding, and simply calling something a property award may not be a winning argument. A bankruptcy court will consider the facts of each case.
For example, if the debtor promised to pay the parties’ son’s educational loan for college, and the obligation is labeled as child support in the decree, the intent of the parties to characterize this debt as support would be clear, and the bankruptcy court could easily designate this debt as not dischargeable. Other facts may not be so clear.
A debtor who petitions for bankruptcy relief under Chapter 13 (a monthly payment plan to pay debtors over 3 to 5 years) must pay his support obligations or his bankruptcy case will be discharged. A skilled bankruptcy attorney in Salt Lake City can guide you every step of the way through the process while ensuring your rights and best interests are well-represented.
Bankruptcy Petition Not Automatic Stay
Generally, the filing of a bankruptcy petition by a party in a divorce case does not act as an automatic stay of the divorce proceeding as it applies to non-property issues. Therefore, the divorce court is free to make rulings pertaining to child custody, alimony, and child support without either party having to petition the bankruptcy court for permission to make such rulings.
There are many other provisions associated with bankruptcy which relate to a divorce case.
To learn more about your situation, your possible legal options, and how our Salt Lake City bankruptcy and divorce lawyer can help you, call Ted Weckel, Attorney at Law today at (801) 845-9029.
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Take the next step by scheduling a confidential consultation at our office. Together we’ll discuss general principles of your case. Call to speak directly with Attorney Ted Weckel at (801) 845-9029 to see how he can help you with your legal issue.Contact Us
Why Experience Matters
Having been a member of the bar since 1991, Ted has expertise in divorce, child custody, or alimony modification is needed to protect your rights and quality of life. Judges and opposing attorneys in Utah are more persuaded by a lawyer who exhibits knowledge of the law, preparation, and respect.Attorney Profile
A Zealous Advocate
As a professional family law attorney in Salt Lake City, Ted is knowledgeable, collaborative and personable. He is a zealous advocate for his clients with a great deal of successful courtroom and mediation experience. We understand that expertise and integrity is key.Client Testimonials
Utah State Bar Member Since 1991
Hundreds of Successful Mediations or Verdicts
Prepares an In-Depth Strategy for Every Case
18 Published Appellate Opinions
6 Years Experience as a Judge Pro Tempore
Nearly Three Decades of Experience