• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About Us

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • Newsworthy
  • You & Your Lawyer
  • Small Business
  • Family Law

Family Lawyer’s Cheat Sheet to Bankruptcy

By Cathy Moran

family lawyer in bankruptcy

Here, in a nutshell, are bankruptcy basics for family lawyers.

This isn’t everything you need to know to navigate a dissolution where one spouse files bankruptcy, or marital debts suggest both spouses should file. It’s a start.

You can get the basic introduction to concepts and terms operative in bankruptcy here. For a look at the broader legal themes at play when family law and bankruptcy collide, see this post.

Bankruptcy basics for family lawyers

Filing Spouses can file alone; only spouses may file together.

Bankruptcy paperwork must list all debts, dischargeable or not, even if disputed

Chapter 7 is a liquidation proceeding where trustee may sell non exempt property, recover preferences, and avoid fraudulent transfers. Most cases are no-asset cases.

Chapter 13 pays debts, in whole or in part, from future income while the debtor keepings his assets

Assets All community property comes into bankruptcy estate, even if only one spouse files. If property has been finally divided in dissolution, only debtor’s share of community property is included.

Debts All debts must be listed, whether dischargeable or not, delinquent or not, liquidated or not.

Creditors must file proof of claim to be paid;  claim can assert amounts different from the listing on the bankruptcy schedules.

Duration Chapter 7, from filing to discharge, generally runs 4-6 months. Chapter 13 plans cover 3-5 years, with discharge entered at after last payment.

Discharge No debts to spouse or kids arising in a dissolution are discharged in Chapter 7. Chapter 13 can discharge equalizing payments and hold harmless clauses

Liens Liens on assets generally survive bankruptcy.

Judicial liens impairing exemptions can be eliminated.

Equalizing payments secured by a lien generally can’t be altered.

Stay Bankruptcy filing enjoins collection of debts existing at filing. Actions to dissolve married status or establish support or paternity are not stayed.

Exemptions Filer can elect one of two exemption schemes to select property to keep. Exempt property may be divided by family court between spouses.

Homestead California homestead is increased to $300K to $600K.

Support Support is not dischargeable in bankruptcy. Bankruptcy law controls whether obligation is support for bankruptcy purposes

Attorneys fees Fees awarded to the other spouse as support are not dischargeable. Fees the debtor owes his own attorney can be discharged.

Priority for payment Support is paid first and in full from assets; support  must be paid in full in Chapter 13.

Trustees Chapter 7 trustee administers assets with non exempt equity. Chapter 13 trustee is disbursing agent for plan payments made by debtor

More bankruptcy basics

When your soon-to-be ex files bankruptcy

How hold-harmless clauses fare in bankruptcy

5 ways to bankruptcy-proof your divorce

More from the Soapbox

  • When Your STBX Files Bankruptcy: An Action PlanWhen Your STBX Files Bankruptcy: An Action Plan
  • Do I qualify for bankruptcy in the Bay Area?Do I qualify for bankruptcy in the Bay Area?
  • 7 Essentials For Better Results From Filing Bankruptcy7 Essentials For Better Results From Filing Bankruptcy
  • How to fight back against EDD’s Form 1099GHow to fight back against EDD’s Form 1099G
  • Can You Rescue Your Business With Chapter 13Can You Rescue Your Business With Chapter 13

Filed Under: Family Law, Uncategorized Tagged With: 2021, divorce, family law

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Coronavirus & Your Finances

About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

The Biggest Lie About Bankruptcy

Read anything about Chapter 7 and you get, "Your possessions are sold in Chapter 7 bankruptcy." That is, flat out, the biggest lie about bankruptcy. It's a liquidation proceeding and your stuff will be sold to pay creditors, the lie goes on. No wonder people are scared off from getting relief from debts … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700

Categories

All content copyright © Moran Law Group. All rights reserved.