Divorce is already a complicated process, but when one spouse is filing for bankruptcy, it can make things even trickier. If you’re in this situation, you might be wondering if you can still get a divorce while your spouse is claiming bankruptcy in New York. Here’s what you need to know.
First, Understand the Different Types of Bankruptcy
Before we dive in, it’s essential to know the different types of bankruptcy that exist. In New York, individuals can file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy.
Chapter 7 bankruptcy
This type of bankruptcy involves liquidating the filer’s assets to pay off their debts and get a fresh start. It’s often called a "liquidation" or "straight bankruptcy" process.
Chapter 11 bankruptcy
This is typically for businesses or individuals with high debt loads, often involving reorganizing finances and securing court approval to continue operating or liquidating assets.
Chapter 13 bankruptcy
Chapter 13 is a debt reorganization process that allows a debtor to repay their debts over time (usually three to five years) through a court-approved payment plan.
How Bankruptcy Can Affect A Divorce
When someone files for bankruptcy, they must go through the bankruptcy court. The court will review their debts and assets, and in case of a Chapter 7, liquidate the assets to pay the debts.
During a bankruptcy, a person’s assets are frozen, including any bank accounts, and all legal proceedings against them are stayed. This automatic stay also protects the debtor from any collection-related activities, including foreclosure.
If you’re trying to divorce a spouse going through bankruptcy, it can complicate things because you may need access to shared property, assets, or money.
It’s Possible to Get a Divorce During Bankruptcy
Divorce and bankruptcy are two separate legal processes, and one does not affect the other. You can still get a divorce in New York State while your spouse is claiming bankruptcy.
However, it’s important to understand that filing for bankruptcy before or during a divorce can complicate the divorce proceedings, as automatic stay orders prevent the division of assets until the bankruptcy discharge.
Once divorce proceedings have started, you may be able to get court approval to divide property and assets, but it’s essential to follow the steps carefully to ensure that you don’t violate the automatic stay.
What to Expect During the Divorce Process
If your spouse has filed for bankruptcy, reaching a divorce settlement will take longer than expected. The bankruptcy court will review the case, and if the court deems that certain debts or assets are exempt in the bankruptcy, they may be included in the divorce settlement.
Additionally, the bankruptcy trustee may take an active role in the divorce proceedings, if deemed necessary.
Conclusion
Divorcing someone who is claiming bankruptcy in New York can make an already complicated process even more challenging. It’s important to seek legal advice from an experienced attorney in both bankruptcy and divorce law.
Remember, bankruptcy and divorce are two separate legal matters, and one does not affect the other. You can get a divorce while your spouse is claiming bankruptcy, but it’s essential that you understand the different types of bankruptcy and how they may affect the divorce process.