My Ex Filed Bankruptcy in Indiana! Now What?

              If you just received notice that your ex-spouse filed bankruptcy in Indiana you are probably nervous and wondering whether you will continue to receive your child support, spousal support, and what will happen to the joint debts that he or she was supposed to pay according to your divorce decree.  These are all very good questions and you should contact your divorce attorney as soon as possible after receiving this notice.  Sometimes it is an easy determination for your divorce attorney.  For example, your child support obligation is not going to go away because your ex filed Chapter 7 or Chapter 13 bankruptcy.  Other times your divorce attorney is simply not familiar enough with the bankruptcy code and it is best to seek the advice of a bankruptcy attorney.

              When I meet with people at Halcomb Singler, LLP, regarding their ex's bankruptcy I start by asking to see their divorce decree or settlement agreement.  This is the document that lays out what amounts will be paid by whom and when.  Typically, when I am meeting with someone whose ex has filed bankruptcy they have filed a Chapter 13 bankruptcy.  I say this because debts tied to a divorce decree are not dischargeable in Chapter 7 bankruptcy.  However, sometimes if your ex-spouse filed a Chapter 13 bankruptcy he or she may be able to discharge a debt owed pursuant to the divorce.

               Whether or not a debt owed pursuant to a divorce decree can be discharged in Chapter 13 bankruptcy depends on whether the debt is what is called a domestic support obligation by the bankruptcy court.  This term is one that is defined in bankruptcy code.  The definition itself is about a half-page long after it is broken down, so I am not going to bother pasting it into this article.  However, the bottom line is that if there is a provision of your divorce decree that says your ex-spouse should pay you an amount that is a lump sum payment for the equalization of marital debt that is not payable in monthly payments over a period of time and that will be paid no matter whether you remarry there is a decent possibility that you will no longer receive said lump sum payment.  Instead, if you file a claim in your ex-spouse's Chapter 13 bankruptcy you will receive a check for a pro-rata amount of that lump sum payment in a few years.  Typically you are only going to receive pennies on the dollar.

              The unfortunate reality that sometimes debts agreed to during the course of divorce negotiations or those ordered by a judge after a final hearing can be "undone" by the filing of bankruptcy is a source of great anger and frustration for those spouses who have themselves depended on the funds as agreed to or ordered by the Court.  In some circumstances it may make sense for the non-bankrutpcy filing spouse to object to the confirmation of the Chapter 13 plan or even to file an adversary proceeding asking the Bankruptcy Court to determine that the debt is one that should be categorized as a domestic support obligation and should therefore be paid in full by the bankruptcy court.

              If your ex-husband or ex-wife has filed bankruptcy I would be happy to meet with you to review your divorce decree and give you my opinion of your rights under the decree now that your ex has filed bankruptcy.  You should know that, unlike when a person wants to talk to me about filing their own bankruptcy, I do charge a fee to meet with a person who wants my opinion with regard to the effect of his or her ex-spouse's bankruptcy.  This fee is simply based on my hourly rate of $200.00 per hour and I require a $500.00 retainer so that I am able to completely review the divorce decree or settlement agreement from your divorce prior to our meeting.  If you would like to set up an appointment click here or call my office at (317) 575-8222.  Halcomb Singler's office is conveniently located in Carmel, Indiana near the intersection of US 31 and Carmel Drive.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.