If you are going through a divorce in New York, you will face many complex and emotional decisions. These decisions often involve critical issues such as child custody, alimony, the division of assets and debts, and more. If your spouse has filed for bankruptcy, you may feel even more overwhelmed. Although your spouse initiated this process, it can significantly impact the outcome of your divorce. Therefore, it’s essential to understand how bankruptcy can influence your divorce proceedings. Please continue reading as we explore the steps you can take to protect your rights and how a determined Garden City Divorce Lawyer can provide valuable assistance during these challenging times.
How Can Bankruptcy Affect My Divorce?
If your spouse begins the bankruptcy process during your divorce, it’s crucial to understand that this can have a signficant impact on the outcome of your divorce. While it won’t necessarily impact child custody, child support, or alimony it certainly can affect how your marital assets are divided.
Generally, all marital assets will become part of your spouse’s bankruptcy estate. When your spouse files, they will receive an automatic stay which prohibits all actions from holding or exercising control over the property of the spouse’s bankruptcy estate. Essentially, this means that creditors cannot contact them regarding their debts. This will impact divorce proceedings as it prevents property division from being executed.
If your spouse has filed for Chapter 7 or Chapter 13 bankruptcy, the New York courts will appoint a bankruptcy trustee to administer the bankruptcy case. Until your spouse’s bankruptcy trustee determines which assets are part of their estate, you cannot proceed. After the bankruptcy case has concluded, the remaining assets will be divided in accordance with New York’s equitable distribution rule.
Nevertheless, if your spouse has filed for Chapter 13 bankruptcy, you might not have to wait for their repayment plan to finalize before you can proceed with your divorce. In most cases, an attorney can assist you in petitioning the bankruptcy court to lift the automatic stay for your divorce to continue.
What Should I Do if My Spouse Files for Bankruptcy During Our Divorce?
If your spouse files for bankruptcy during your divorce, it’s in your best interest to consult an experienced family law attorney who can help you understand your rights and legal options moving forward. Unfortunately, bankruptcy can delay your div force and impact your ability to claim certain assets. As such, an attorney may be able to negotiate a settlement with your spouse quickly to ensure that your interests are safeguarded before the bankruptcy court makes decisions regarding asset distribution.
At the Law Offices of Eyal Talassazan, P.C. we are prepared to do everything in our power to help you achieve the best possible outcome for your case. Connect with us today to learn more about what we can do for you.
