Bankruptcy cases, unfortunately, result from the occurrence of unforeseen circumstances. Divorce is a common cause of bankruptcy. Spouses incur joint debts and usually interconnect their financial assets to some extent. When filing a divorce case, the spouses need to untangle their assets and divide them equitably.
When a bankruptcy case is filed, the U.S. Bankruptcy Court issues a "Stay" order that prohibits the transfer of any of the Debtor(s)' assets. If a divorce case is pending, the Domestic Relations Court is also prohibited from issuing any order that divides the bankruptcy debtor's assets. It is important, then, to meet with a bankruptcy attorney to determine the best time to file a bankruptcy case and what type of bankruptcy case to file. This is particularly important when a Chapter 13 bankruptcy case must be filed, because that type of case can remain open for up to five (5) years. During that entire time, the "Stay" order remains in effect, and the property of the debtor(s) cannot be divided by the Domestic Relations Court.
The United States Bankruptcy Code does allow a domestic relations court to establish, enforce, or modify a support order ( child support or spousal support) during a bankruptcy case. In the Southern District of Alabama, you are required to file a Motion for Relief from Automatic Stay ( filing fee is applicable) which asks the Court to lift its "Stay" order for the limited purpose of allowing the Domestic Relations Court to enter an Order concerning child support or spousal support.
If you have any questions concerning your domestic relations or divorce matter in connection with a bankruptcy issue, CALL Me, I'll Be there for you. -Kevin Ryan, Attorney at Law (251) 241-5234.