Divorce and Bankruptcy

The marriage, no pun intended, between divorce proceedings and bankruptcy is complicated and can be intimidating. In a nutshell, bankruptcy proceedings go through the federal court system, and essentially trump state-court divorce proceedings. I have a case involving post-divorce contempt proceedings where a Defendant has refused to pay alimony. The Defendant filed a “Suggestion of Bankruptcy” in the divorce court, and therefore “stayed”, or paused, the contempt proceedings. Alimony and child support are not dischargeable in bankruptcy, so this Defendant will not avoid his obligations, but the divorce court proceedings are on hold until the bankruptcy is finalized.

This is how my response read (names removed):

  1. Defendant’s Suggestion of Bankruptcy informs this Court that Defendant filed a petition for relief under Title 11, United States Code, case no. XX-XXXX, which was granted on XXXXX, 2012.
  2. Defendant further asks this Court to stay the Plaintiff’s contempt proceedings, and that said action has been stayed by “11 U.S.C. § 362”.
  3. Section 523 of the Bankruptcy Code does not list alimony or marital support payments as an eligible discharge in bankruptcy, listing two exceptions that do not apply in this case.
  4. Further, 11 U.S.C. §362(b) states,

(b) The filing of a petition under section 301302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay—

(1) under subsection (a) of this section, of the commencement or continuation of a criminal action or proceeding against the debtor;

(2) under subsection (a)—

(A) of the commencement or continuation of a civil action or proceeding—

(i) for the establishment of paternity;

(ii) for the establishment or modification of an order for domestic support obligations; (emphasis added)

 

In this case, the state (divorce) court denied my Objection and the bankruptcy proceedings trumped the contempt action. If you have questions regarding divorce, alimony, child support, or contempt actions in Alabama, contact my office today for a free consultation, (205) 988-5570.

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