The Troublesome Trio – Women, Child Support, and Bankruptcy in Indiana: part Three

December 1, 2012 3:47 pm Published by

When it comes to filing individual bankruptcy in Indiana, we know our women clients are fighting for their financial lives, and that the first order of business for them must be getting answers.  And one first place we start in providing those answers relates to a very disturbing statistic: Fewer than half of single moms receive all the child support they were awarded in their divorce decrees!

It’s important to point out that divorce and bankruptcy in Indiana are two entirely separate legal proceedings, each with its own set of laws and rules to follow. That holds true whether it’s the ex-spouse filing individual bankruptcy in Indiana, the already-divorced woman herself filing bankruptcy, or both. The two processes, though, are very much intertwined. Indiana bankruptcy law deals only with debts that are in existence the day you file.  On the other hand, divorce may break up a couple legally, yet leave them financially tied to each other and to their past debt obligations.

Just this summer, in Consumer Bankruptcy News, I read about a very complicated situation in Florida that I want to share with Bankruptcy in Indiana readers to emphasize how extra-important it is, whenever a divorce and a bankruptcy are involved, to seek out an experienced legal advisor who understands how divorce law and Indiana bankruptcy law interact. Here are the highlights of that Florida situation:

An involuntary bankruptcy was filed against Mr. Michael D
Michael listed the Florida Dept. Of revenue as a creditor for a $180,000 claim of child support.
The bankruptcy court granted a bankruptcy discharge of debt to Michael.
The Dept of Revenue attempted to collect the child support and back interest on the support debt.
Bankruptcy court disallowed the claim.
The case was appealed to the 11th Circuit Court.
The court ruled as follows:
The bankruptcy court was correct in ruling that child support, which is a nondischargeable debt under bankruptcy law, would not be paid by the trustee through the bankruptcy plan.
However, the Department of Revenue was within its rights to keep up collection efforts for the child support (the bankruptcy automatic stay did not apply to this kind of debt).
 
All the bankruptcy attorneys who work in the Zuckerberg bankruptcy law offices would agree; no two situations are exactly alike. But, in one sense, certain factors seem to be important to many of our women clients. We know women have always taken pride in juggling all the parts of their lives, taking control of your own affairs, and caring for their loved ones. Then, "life happened." We understand. Now we want to make sure each woman understands her options.

 

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This post was written by Mark Zuckerberg

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