Divorce and bankruptcy are two complex legal processes that can become even more complicated when they occur simultaneously. If you are going through an uncontested divorce in Alabama and one or both parties have filed for bankruptcy, it’s important to understand how to handle the situation.
Understand the Automatic Stay
When an individual files for bankruptcy, an automatic stay goes into effect. This stay prevents creditors from pursuing collection efforts, such as foreclosure, wage garnishment, or repossession. It also prevents a divorce court from dividing property and debts until the bankruptcy case is resolved. The automatic stay can have a significant impact on an uncontested divorce case. It’s important to understand how it works and how it may affect your case.
Consult with a Bankruptcy Attorney
If one or both parties have filed for bankruptcy during an uncontested divorce, it’s important to consult with a qualified bankruptcy attorney. An attorney can help you understand the options available to you and provide guidance on how to proceed with the divorce case.
Understand the Bankruptcy Process
Bankruptcy can be a complex process that involves filing specific forms, attending court hearings, and making payments to a trustee. It’s important to understand the bankruptcy process and how it may affect your uncontested divorce case.
Wait for the Bankruptcy to be Resolved
If one or both parties have filed for bankruptcy during an uncontested divorce, it may be necessary to wait until the bankruptcy case is resolved before finalizing the divorce. The bankruptcy court must discharge debts and lift the automatic stay before property division and other divorce-related issues can be addressed.
Individual Bankruptcy During Divorce
If a spouse files for individual bankruptcy during the divorce, the equitable distribution of the marriage may be stayed, pending the bankruptcy. The individual’s property becomes part of the bankruptcy estate, which may include prohibiting action to sell or divide jointly held property, including marital property.
Filing for bankruptcy after a divorce may have no impact on the non-filing spouse. However, changes in the filing spouse’s financial situation could be the basis for a future post-judgment modification.
Generally, a bankruptcy filing will not impact a child custody dispute or determination of child support. However, the financial issues surrounding a bankruptcy could impact the way child custody or visitation decisions are made.
Bankruptcy and a cheap no fault divorce are complex legal processes that can become even more complicated when they occur at the same time. If you or your spouse has filed for bankruptcy during an uncontested divorce in Alabama, it’s important to understand the automatic stay, consult with a qualified bankruptcy attorney, and be patient while the bankruptcy case is resolved. By taking these steps, you can navigate this complex situation and move forward with your life.