Obligations that are considered by the Bankruptcy Court to be “domestic relations orders” are non-dischargeable and priority debts. They are defined in U.S. Bankruptcy Code Title 11 Section 101 14(A).
In summary, the term 'domestic support obligation' includes child support, alimony, or other support payment, and can include payments for housing, health insurance or other costs paid on behalf of a spouse or ex-spouse. If payments are owed and in arrears then the 'domestic support obligation may also include interest and the interest is non-dischargeable as well.
It is very important when preparing a Chapter 7 Bankruptcy to be aware that these debts will not be discharged, i.e. will still be owed after the bankruptcy.
It is likewise very important when preparing a Chapter 13 Bankruptcy to be include the 'domestic support obligation' in the Chapter 13 plan as a priority debt and to be clear about how arrears will be paid versus how the ongoing payment reduces the filer's available income. If these issues are not addressed specifically, the Bankruptcy Court may find that the Plan is not binding against your ex-spouse as was the case in In re Owen, 2009 WL 693161 (Bky.E.D.Tenn. March 13, 2009). For an excellent explanation of what happened in that case check out the following article on the Bankrutpcy Law Network: "Stealth" Plan Provisions: Confirmation of Chapter 13 Plan Did not Alter Domestic Support Obligation".
Showing posts with label Bankruptcy Court. Show all posts
Showing posts with label Bankruptcy Court. Show all posts
Monday, July 9, 2012
Friday, February 10, 2012
QUESTION OF THE WEEK: Bankruptcy or Divorce, which should come first?
If I am facing both divorce and bankruptcy, should I file for bankruptcy before, during, or after filing for divorce?
Answer: When a bankruptcy is filed, all lawsuits against the debtor are immediately stayed. If a bankruptcy is filed during a divorce case, the automatic stay applies to the divorce case as well. The divorce Judge may proceed on issues of child support, alimony and custody of children, but may not make any decisions relating to the division of assets and debts without the permission of the bankruptcy court, and any decisions made by the divorce Judge are reviewable by the bankruptcy Judge.
Finishing the divorce action before beginning the bankruptcy filing allows the divorce action to proceed to its natural conclusion without interruption by the bankruptcy court. It is still possible, though, for the Bankruptcy Court to undo the Agreement or Judgment of the Divorce Court if it appears the parties were attempting to defraud creditors (for instance if all of the assets were transferred to the non-debtor spouse rather split equitably). Despite this risk, it is unlikely if the division is equitable that there would be any issue, and both cases would like proceed more smoothly one after the other, rather than simultaneously.
Likewise, there are certain circumstances where it might make more sense to file for bankrutpcy prior to filing the divorce. For instance in a case where both spouses had significant debt, they can file as joint debtors so long as they are still married.
Even if only one of the parties intended to file, there is a recent case which suggests that some of the protections for the debtor extend to the non-debtor spouse (protections that might not apply if the parties are already divorced). For an excellent explanation of this case visit the Bankruptcy Law Network post titled: Actions Taken Against Non-Debtor Spouse Violate Discharge Injunction.
You should consult with an attorney that is familiar with both bankruptcy and divorce law to determine the best course of action in your specific case. The facts of your case, such as the terms of the proposed property settlement or transfers of property under the agreement may be hurtful to your bankruptcy case if you plan on filing for bankruptcy shortly after the conclusion of your divorce matter. Having an attorney that can explain the bankruptcy consequences of your decisions during your divorce will be critical in helping you get your fresh start.
Answer: When a bankruptcy is filed, all lawsuits against the debtor are immediately stayed. If a bankruptcy is filed during a divorce case, the automatic stay applies to the divorce case as well. The divorce Judge may proceed on issues of child support, alimony and custody of children, but may not make any decisions relating to the division of assets and debts without the permission of the bankruptcy court, and any decisions made by the divorce Judge are reviewable by the bankruptcy Judge.
Finishing the divorce action before beginning the bankruptcy filing allows the divorce action to proceed to its natural conclusion without interruption by the bankruptcy court. It is still possible, though, for the Bankruptcy Court to undo the Agreement or Judgment of the Divorce Court if it appears the parties were attempting to defraud creditors (for instance if all of the assets were transferred to the non-debtor spouse rather split equitably). Despite this risk, it is unlikely if the division is equitable that there would be any issue, and both cases would like proceed more smoothly one after the other, rather than simultaneously.
Likewise, there are certain circumstances where it might make more sense to file for bankrutpcy prior to filing the divorce. For instance in a case where both spouses had significant debt, they can file as joint debtors so long as they are still married.
Even if only one of the parties intended to file, there is a recent case which suggests that some of the protections for the debtor extend to the non-debtor spouse (protections that might not apply if the parties are already divorced). For an excellent explanation of this case visit the Bankruptcy Law Network post titled: Actions Taken Against Non-Debtor Spouse Violate Discharge Injunction.
You should consult with an attorney that is familiar with both bankruptcy and divorce law to determine the best course of action in your specific case. The facts of your case, such as the terms of the proposed property settlement or transfers of property under the agreement may be hurtful to your bankruptcy case if you plan on filing for bankruptcy shortly after the conclusion of your divorce matter. Having an attorney that can explain the bankruptcy consequences of your decisions during your divorce will be critical in helping you get your fresh start.
Saturday, February 4, 2012
Waiting in line for the new iPhone? There's no wait (and no cost) to download our Apps!
Today, June 24, 2010, the day of the iPhone 4.0 release, many, many Apple devotees are waiting in line, no doubt playing games, checking e-mail and surfing the web on their 3GS until they get their hands on the newest iPhone. Well, whether or not you've braved the lines to be the first to have the new device, you can still download the Kelsey & Trask, P.C. Web-Apps and iPhone Apps. (see the end of this post for instructions on how to access these apps on other smartphones as well)
iPhone Apps:
The Child Support Calculator App
Use this worksheet to calculate the presumptive amount of child support to be ordered by the Probate & Family Courts in Massachusetts based on the Massachusetts Child Support Guidelines (including all of the calculations required for filling out the court form). You can then save your calculations, and even e-mail them.
Must have app for Family Law Attys - ★★★★★
Review by Mass Attorney
Must have app. Quickly calculate child support according to the guidelines and try different income scenerios.
The Divorce Spousal Support Calculator App
Some states use formulas to calculate presumptive alimony. And notwithstanding the lack of legislative support, some Judges in Massachusetts have suggested doing the same. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible.
All of these formulas are included in this calculator, which we believe can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders.
In addition, you can access the full Article (The Divorce Spousal Support Calculator: An Alimony Formula Resource and Tool for Computing Suggested Alimony Payments in Divorce Cases) directly from the App by clicking on the Settings button in the lower left-hand corner of the App.
Similar to the Child Support Calculator App, you can also save and e-mail your calculations.
The Chapter 7 Means Test Calculator App
The means test is a test required under the new bankruptcy law to determine a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the Court dismiss your cases under Section 707(b) of the Bankruptcy Code.
Use this App to determine whether you qualify for Chapter 7 bankruptcy under part a of the Chapter 7 Means Test. You can even save or e-mail your calculation to access it later. If your income is greater than the median income for your state of residence and family size, you still might meet part b of the means test after taking into consideration certain expenses and deductions as defined by the Bankruptcy Code. You should consult with an attorney to determine your eligibility.
Web Apps:
These three Apps are also available as Web-Apps and can be accessed directly on our mobile site or through the Apple Web-App Store.
The Child Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/childsupport.htm
The Divorce Spousal Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/spousalsupport.htm
The Chapter 7 Means Test Calculator Web-App
- Direct Link: mobile.kelseytrask.com/meanstest.htm
In addition we have a recently created fourth web-app:
The Chapter 7 Timeline Calculator Web-App
- Direct Link: mobile.kelseytrask.com/7timeline.htm
The bankruptcy court is very strict regarding deadlines. Often, missing a deadline will result in the dismissal of your Bankruptcy Case. Therefore, it is very important that all documents are filed accurately and on time with the Bankruptcy Court.
This App displays approximate dates for deadlines and events in a Chapter 7 Bankruptcy case when you enter a filing date. These dates are subject to change by amendments to the U.S. Code, or may vary due to local rules or practices or even due to the specific facts of your case. If you have any questions you should consult with an attorney when reviewing this timeline.
Don't have an iPhone, that's okay too. Whether you are an Android, Blackberry or other smartphone user, you can still use all of our great calculators in your web-browser on our mobile pages designed just for smartphones. Just visit m.kelseytrask.com or mobile.kelseytrask.com on your mobile phone and you should see a page that looks something like this:
iPhone Apps:
The Child Support Calculator App
Use this worksheet to calculate the presumptive amount of child support to be ordered by the Probate & Family Courts in Massachusetts based on the Massachusetts Child Support Guidelines (including all of the calculations required for filling out the court form). You can then save your calculations, and even e-mail them.Must have app for Family Law Attys - ★★★★★
Review by Mass Attorney
Must have app. Quickly calculate child support according to the guidelines and try different income scenerios.
The Divorce Spousal Support Calculator App
Some states use formulas to calculate presumptive alimony. And notwithstanding the lack of legislative support, some Judges in Massachusetts have suggested doing the same. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. All of these formulas are included in this calculator, which we believe can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders.
In addition, you can access the full Article (The Divorce Spousal Support Calculator: An Alimony Formula Resource and Tool for Computing Suggested Alimony Payments in Divorce Cases) directly from the App by clicking on the Settings button in the lower left-hand corner of the App.
Similar to the Child Support Calculator App, you can also save and e-mail your calculations.
The Chapter 7 Means Test Calculator App
The means test is a test required under the new bankruptcy law to determine a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the Court dismiss your cases under Section 707(b) of the Bankruptcy Code. Use this App to determine whether you qualify for Chapter 7 bankruptcy under part a of the Chapter 7 Means Test. You can even save or e-mail your calculation to access it later. If your income is greater than the median income for your state of residence and family size, you still might meet part b of the means test after taking into consideration certain expenses and deductions as defined by the Bankruptcy Code. You should consult with an attorney to determine your eligibility.
Web Apps:
These three Apps are also available as Web-Apps and can be accessed directly on our mobile site or through the Apple Web-App Store.
The Child Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/childsupport.htm
The Divorce Spousal Support Calculator Web-App
- Direct Link: http://mobile.kelseytrask.com/spousalsupport.htm
The Chapter 7 Means Test Calculator Web-App
- Direct Link: mobile.kelseytrask.com/meanstest.htm
In addition we have a recently created fourth web-app:
The Chapter 7 Timeline Calculator Web-App
- Direct Link: mobile.kelseytrask.com/7timeline.htm
The bankruptcy court is very strict regarding deadlines. Often, missing a deadline will result in the dismissal of your Bankruptcy Case. Therefore, it is very important that all documents are filed accurately and on time with the Bankruptcy Court.This App displays approximate dates for deadlines and events in a Chapter 7 Bankruptcy case when you enter a filing date. These dates are subject to change by amendments to the U.S. Code, or may vary due to local rules or practices or even due to the specific facts of your case. If you have any questions you should consult with an attorney when reviewing this timeline.
Don't have an iPhone, that's okay too. Whether you are an Android, Blackberry or other smartphone user, you can still use all of our great calculators in your web-browser on our mobile pages designed just for smartphones. Just visit m.kelseytrask.com or mobile.kelseytrask.com on your mobile phone and you should see a page that looks something like this:
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