The Interaction of Divorce and Bankruptcy

Divorce and personal bankruptcy are two of the most emotionally trying events that a person can experience. The federal and state laws that govern both events are designed to provide the best protection for all parties and to make the processes move forward as smoothly as is possible, yet both events will include a few inevitable bumps in the road. A Massachusetts divorce lawyer has seen how simultaneous divorce and bankruptcy filings might interact and affect each other as well as the interests of the parties involved in the proceedings.

The primary question that those parties will have is what happens when a married couple is going through a divorce and the spouse that has been ordered to pay alimony or maintenance files for personal bankruptcy. The other spouse, who would receive alimony or maintenance payments, will be justifiably concerned that the bankruptcy will cause those payments to be discharged. Fortunately for that spouse, the U.S. bankruptcy laws specify that alimony and maintenance payments are not excused by a payor's personal bankruptcy unless certain specific conditions are satisfied. Those conditions establish a very high threshold that a former spouse must meet in order to be excused from making alimony payments.

Specifically, a Massachusetts resident who is ordered to pay alimony will not be excused from making those payments unless he can prove the he is not able to make them from his income or property. He will also need to prove that he reasonably needs that income or property for his or his dependents' maintenance or support. If the person who is ordered to pay alimony also owns a business, he has to show that he needs the income or property to pay business expenses that are necessary to continue, preserve, and operate the business.

Alternately, a person who has been ordered to pay alimony can discharge that obligation with personal bankruptcy if he can prove that discharging the alimony debt will give him a greater benefit than the detriment that would flow to a former spouse or his children who lose access to those payments. This balancing of interests is a common process across many types of legal proceedings. Alimony obligations will be discharged through this balance analysis only with extreme proof and verification of the parties' respective interests.

The attorneys at the Kovacs Law Firm in Worcester focus their efforts on protecting the interest of clients who are in divorce or bankruptcy proceedings. Please contact us to schedule a consultation on how we can assist you in these matters.