Los Angeles Bankruptcy and Family Law Attorneys

Filing Bankruptcy After a Divorce in California

Financial problems often go hand in hand with family law issues. Not having enough money can create a strain in your marriage or cause problems with a child support claim. Further, after couples divorce, it can be difficult to adjust to living on one income if you have been used to dealing with two. Not surprisingly, bankruptcy is a common theme in family law matters.

If you are facing overwhelming debt and want to regain control of your finances, talk to our bankruptcy attorneys in Los Angeles. RHM LAW LLP has helped thousands of individuals in the Los Angeles area take the first steps toward financial recovery.

During a 30-minute risk-free consultation, we will discuss your situation and advise you on whether bankruptcy suits your needs. Call (213) 344-0043 now.

California Bankruptcy Lawyers Providing Trusted Guidance

When bankruptcy and divorce or another family law issue occur at the same time, the intersection of the laws in each area creates a number of questions, such as:

• Can my spouse and I jointly file for bankruptcy while we are going through a divorce?
• How are joint debts separated if I file for bankruptcy and my spouse does not?
• If I file for bankruptcy, do I still need to pay child support?
• Are spousal support obligations discharged in bankruptcy?
• What happens if I lose my job while I am in Chapter 13 bankruptcy?
• My home is facing foreclosure. Will we lose our equity in our divorce?

For these and other questions, it is important that you get solid answers from someone who knows bankruptcy inside and out. At RHM LAW LLP, we understand all aspects of Chapter 7 bankruptcy and Chapter 13 bankruptcy. We welcome the opportunity to meet with you and discuss your particular situation.

If financial distress is causing arguments, there is a solution to your financial hardship! Chapter 7 or Chapter 13 bankruptcy could give you a fresh start, save your house, your car, and, potentially, your marriage.

The Impact of Bankruptcy on Child Custody and Visitation

Filing for bankruptcy can influence decisions related to child custody and visitation, though indirectly. Courts prioritize the best interests of the children in custody matters, but financial stability is an important factor in these decisions.

• Financial Impact on Custody Arrangements: If a parent files for bankruptcy, it may affect their ability to provide for the child’s needs. This could influence custody arrangements or parenting time.
• Impact on Visitation: Bankruptcy itself won’t directly change visitation schedules. However, if financial issues lead to non-payment of child support or other responsibilities, it could result in legal consequences, potentially affecting visitation rights.
• Debt and Parenting Stability: A parent struggling with debt might face challenges in providing a stable home environment, which courts consider when making custody decisions.

Protecting Your Assets in Divorce and Bankruptcy

When facing both divorce and bankruptcy, protecting your assets is essential. Both situations can put your savings and property at risk, but there are strategies to safeguard valuable assets.

• Retirement Funds: Certain retirement accounts, like 401(k)s and IRAs, are often protected from bankruptcy claims. However, these funds may be considered in divorce proceedings and could be divided as part of the settlement.
• Family Heirlooms and Personal Property: It’s important to document and provide proof of ownership for family heirlooms or sentimental items. While some assets can be protected, they may still be subject to division in divorce.
• Homestead Exemption: In some states, the home may be protected under a homestead exemption. This can help safeguard your primary residence during bankruptcy and divorce, but exemptions vary by state.

How Bankruptcy Affects Alimony/Spousal Support Payments

Bankruptcy can have a significant effect on spousal support obligations, depending on the type of bankruptcy filed.

• Chapter 7 Bankruptcy: Generally, alimony or spousal support payments cannot be discharged in Chapter 7 bankruptcy. This means that the obligation to pay these amounts continues even after the bankruptcy is filed.
• Chapter 13 Bankruptcy: Chapter 13 may allow for restructuring payments, but alimony and spousal support are still considered priority debts that must be paid. In some cases, a modified payment plan could reduce the amount paid each month.

Debt Discharge and the Role of Property Division in Divorce

Bankruptcy can complicate the division of debts and property in a divorce. Understanding how debts are divided and discharged is crucial in both situations.

• Debt Division: Debts incurred during the marriage may be divided in a divorce. Bankruptcy could influence how these debts are shared, especially if one spouse files for bankruptcy while the divorce is ongoing.
• Discharging Debt: If a spouse files for bankruptcy, they may be able to discharge certain types of debt, which could reduce the overall financial burden during the divorce settlement. However, some debts, like child support, cannot be discharged.
• Property Division: Property division in divorce may need to take into account any debts that are discharged in bankruptcy, as well as the financial stability of each spouse. Bankruptcy could influence how property is divided or allocated to address any outstanding debts.

Frequently Asked Questions (FAQs)

• Can bankruptcy affect my child custody or visitation rights?
  Bankruptcy itself does not directly impact child custody or visitation schedules. However, financial struggles related to bankruptcy, such as an inability to pay child support, could lead to legal issues that may affect custody or visitation arrangements.
• How does filing for bankruptcy impact spousal support payments?
  If you file for Chapter 7 bankruptcy, spousal support (alimony) obligations are not discharged. Chapter 13 allows for the restructuring of payments, but alimony is still considered a priority debt that must be paid. A modified payment plan might reduce monthly support payments, but the obligation remains.
• Can I protect my retirement savings during a divorce and bankruptcy?
  Certain retirement accounts, such as 401(k)s and IRAs, may be protected from bankruptcy claims. However, these accounts can still be considered part of the property division in a divorce and might be subject to division, depending on your state's laws.
• What happens to joint debts if I file for bankruptcy but my spouse does not?
  If you file for bankruptcy and your spouse does not, the bankruptcy will address only your debts. You will still be responsible for joint debts, but you may have to negotiate with your spouse regarding how to handle those obligations.
• Can I file for bankruptcy before or after my divorce?
  Whether you file for bankruptcy before or after your divorce depends on your specific situation. Filing before can simplify the division of assets and debts, while filing after may allow you to negotiate a more favorable divorce settlement. It's important to consult with both a bankruptcy and a divorce attorney to determine the best timing.
• Will bankruptcy protect my home during a divorce?
  Bankruptcy can provide protection for your primary residence through exemptions, such as the homestead exemption. However, the fate of your home may also depend on how it is divided during the divorce. In some cases, you may be able to keep your home, especially if the debt is discharged.

To schedule a 30-minute risk-free consultation with our Los Angeles bankruptcy and divorce attorneys, contact our firm right away. For your convenience, our bilingual staff works out of our offices in Los Angeles and Encino.