Spanish and Arabic translation available | 

What Happens if a Spouse Files for Bankruptcy During a Divorce in New Jersey?

While no one wants to consider the idea of facing divorce or bankruptcy in their life, the reality is that it can sometimes happen to people at the same time. If a couple is facing divorce proceedings and one spouse files for bankruptcy during this time, it can cause complications for the proceedings. It is important to know what to expect in these situations. Continue reading below to learn more and contact an experienced New Jersey divorce attorney if you are facing this situation.

What Happens When Bankruptcy is Filed During a Pending Divorce?

When dealing with matters of bankruptcy, it is important to understand the concept of the “automatic stay.” When bankruptcy is filed by a spouse, the automatic stay goes into effect immediately. This can assist the debtor during this time, as it prohibits creditors from collection activities as well as puts all other legal proceedings on hold. This can include a divorce. While this can help the spouse who owes certain debts, it can be problematic for the other spouse. 

How Can Bankruptcy During a Divorce Impact Me?

One of the most notable parts of a bankruptcy case is dischargeable debts. The debts that are able to be discharged can vary case by case. When bankruptcy is filed during a divorce, there are often similar requests for these cases. This is usually to discharge claims of alimony, child support, or property settlements. Ultimately, it is up to the bankruptcy judge that is in charge of the case to make these decisions. While this is true, there general rules that usually apply in most New Jersey cases, such as:

  • Claims for alimony generally cannot be discharged in a bankruptcy proceeding
  • Claims for child support generally cannot be discharged in a bankruptcy proceeding
  • Claims for property settlements may generally be discharged in a bankruptcy proceeding if the divorce judgement has not been finalized

Contact our Firm

If you need an experienced legal team to guide you through your divorce, contact Townsend, Tomaio & Newmark L.L.C today.