Issue #52	January 2008
Know someone else going through the divorce process? If you think they could benefit from this newsletter feel free to pass it on in its entirety to them. "Divorce is the psychological equivalent of a triple coronary by-pass. After such a monumental assault on the heart, it takes years to amend all the habits and attitudes that led up to it.."     - Mary Kay Blakely Don't forget to mention DivorceHQ.com when contacting the divorce professionals listed on the site.
In This Issue: Debt and Divorce Family Law and the New Bankruptcy Code     by Theodore Sliwinski, Esquire Read All About It! Divorce Humor New Attorney, Mediator and Divorce Services Members.
1. Debt and Divorce As if going through a divorce isn't painful enough add managing marital debt to that and you may have a recipe for disaster. When it comes to credit card debt the statistics are staggering . According to MSN Money 8.3 percent of households owe $9,000 or more on their cards. If you fall into that category and are considering a divorce, you need to know the facts about debt and divorce. As soon as you know that divorce is in your future, you should get copies of your credit reports from all three of the major credit bureaus. Credit reports are not combined for married couples. They are separate documents for each individual. The reports will list all of your and at least some of your spouse's credit-related activity. This is when may people unearth accounts or debts they were not previously aware of. The sooner you know what you are dealing with the better. The next step is if you have credit accounts that are held jointly, now is the time to close them. If the other partner uses the accounts before the divorce or legal separation, you may be held responsible for repayment. When you cancel the credit cards, make sure they read "closed by consumer" so it reflects more positively on your credit report. This is the time to educate yourself about your state's divorce laws concerning debt as each state has different laws. If you live in a community property state, any debt you or your spouse incurred during the marriage, regardless of who racked it up, is a marital debt - meaning the creditor can hold both of you liable for repayment. If you live in a separate property state, this may not be the case. Contact your State Bar Association to learn more about legal responsibility and debt for your state. Remember that an agreement in your divorce decree to pay specific debts is for is not legally binding in the eyes of your creditors. If the debt is jointly held, creditors can come after either of you to collect what is owed. That is why it is important for both of you to treat the post-divorce debts responsibly. Missed payments will affect each of your credit report and collection action may start for either of you. If you suspect that your spouse will file for bankruptcy after the divorce, be sure to discuss it with your lawyer before you go to court. The separation agreement may be structured to take bankruptcy into consideration. If your former spouse does discharge joint debts in bankruptcy, you may be held responsible for the entire payment, though sometimes bankruptcy court will discharge or release the spouse from paying those debts, but don't count on it. Divorce is often an incredibly draining, and the last thing you may feel like doing is spending time and energy on your money issues. But keep in mind the value of your credit score. If you need assistance don't be afraid to ask for help. Your financial institution may offer guidance with your accounts, and your attorney will advise you on your legal rights and responsibilities.
2. Family Law and the New Bankruptcy Codes         by Theodore Sliwinski, Esquire There are several major changes that the new bankruptcy code hereinafter referred to as the BACPA has made on the practice of family law. All domestic support obligations are now classified "first" priority claims under section 507(a)(1) of the Bankruptcy Code. Second among the first priority debts are those domestic support obligations that are assigned to a governmental unit. Basically, any child support that is owed to probation or to the local county board of social services is also given priority status. How has the 2005 BACPA affected Chapter 13 practice? Section 1307 (c) of the Bankruptcy Code was amended to make the failure to pay post-petition support a grounds for dismissal of the bankruptcy case. Basically, if a debtor is not paying his child support then his Chapter 13 case can be dismissed. In addition, new section 1322(a)(4) of the Code provides that, although support owed is now a priority debt, it need not be paid in full if the debtor proposes a five-year plan that commits all of the debtor's disposable income and the debtor cannot pay the support obligation in full. This provision is intended to prevent large government support debts from making a mortgage cure and other chapter 13 remedies unavailable. Unpaid child support will of course not be discharged as is true under existing law. New section 1325 (a)(8) of the Code makes the payment of post-petition support one of the standards for a chapter 13 plan confirmation. Section 1328(a) of the Code likewise is amended to require a debtor, in order to obtain a discharge, to certify that all post-petition support and all support requested to be paid by the plan has been paid. In summary the net result of all of these amendments is that it gives domestic support creditors much more power in chapter 13 cases, and the ability to reject the plan if they are not paid. How has the 2005 BACPA affected the automatic stay provisions for a family law case? The 2005 Act adds many new exceptions to the automatic stay provisions for proceedings dealing with child custody, visitation rights, domestic violence, and divorce. These exceptions are common sense corrections for proceedings that do not have an impact on a bankruptcy filing. Many people had probably assumed that they were not stayed, though in fact they usually were, as legal proceedings that could have been commenced prior to petition. Basically, the new 2005 Act has given child support creditors the ability to ignore the automatic stay. Consequently, these new changes render the bankruptcy process subservient to the divorce case or child support hearing. The family law case now takes priority over the bankruptcy case. Therefore, the automatic stay will no longer automatically stop a divorce case or a child support hearing. It is important to emphasize that a support creditor still remains bound by a confirmed plan, at least as long as the current support is being paid and the debtor is performing under the plan. How has the 2005 BACPA affected the issue of the dischargeability of child support and of alimony? Section 523(a)(5) of the Code now makes all support obligations non-dischargeable in all chapters. In addition, all property settlement debts that are owed to a spouse, former spouse, or a child of the debtor are non-dischargeable in a chapter 7. Therefore, a non-debtor spouse is no longer technically required to file an adversary complaint to block a debtor spouse from trying to bankrupt debt that is owed under a property settlement agreement. However, it is my professional opinion that a prudent non-debtor spouse should still file an adversary complaint. A non-debtor spouse should make certain that a debtor ex-spouse is not successful in his or her efforts in trying to discharge martial debts that are owed under a property settlement agreement. Due caution should be exercised until the bankruptcy laws on these issues are settled. The ability to pay and the balancing tests are eliminated from section 523(a)(15) of the Code. Section 523 (c) of the Code is amended to no longer require that dischargeability proceeding involving a property settlement be brought in the bankruptcy court. It is important to emphasize that these types of debts still remain dischargeable in a chapter 13 case. Therefore, I strongly believe that most future bankruptcy litigation over family law debts will be litigated in a chapter 13 case rather than a chapter 7 case. How has the 2005 BACPA affected the issue of the exemption of certain assets in a bankruptcy case? The new 2005 Act has also made some significant changes with regard to the treatment of exemptions in a bankruptcy case. Section 522(c)(1) of the Bankruptcy Code is amended to allow domestic support creditors to proceed against exempt property, including property exempted under state law. This change means that a debtor who files a bankruptcy case, and if he owes support debts then his exempt property as listed in his bankruptcy scheduled, can still be seized to pay for any of his child support debts. Section 522(f) of the Code was also amended to prevent the avoidance of a judicial lien for domestic support obligations. The main effect of this change is to include any debts that are assigned or owned to probation or to a county board of social services agency among those protected from lien avoidance. How has the 2005 BACPA affected the issue of preferences in a bankruptcy case? Section 547 of the Code is amended to protect all bona fide payments on domestic support obligations from preference avoidance. The main effect of this amendment is that it adds protection for payments on child support to probation or to a county board of social services agency. What are the new trustee duties in a family law case as required by the new 2005 BACPA? The bankruptcy trustee must now give notice to all holders of domestic support obligations of the services provided by the state child support enforcement agency and the right to use such agency's services to collect child support during and after the bankruptcy case. The trustee must also send notice of the claim to the state child support enforcement agency. This notice can be combined with the notice to the hold of the support claim. Another notice must also be sent to the hold of a support claim and the state child support enforcement agency when a discharge is granted. The notice must contain the last known address of the debtor and the debtor's employer. It must also contain the name of each creditor holding a claim that was not discharged under section 523(a)(2), (4), or (14A) of the code, or that was reaffirmed under section 524 (c) of the Code. ABOUT THE AUTHOR Theodore Sliwinski, Esquire, dedicates his practice to providing quality and very affordable legal services to the public. He believes that everyone should be able to afford quality legal services. He has thirteen years of legal experience and has handled hundreds of divorces and bankruptcies cases. He is headquartered in central New Jersey. Affordability, accessibility, responsiveness and personal commitment is what every client receives. Mr. Sliwinski can be contacted by phone at (732) 257-0708 or or Visit Web Site
3. Read All About It! For online divorce books go to:DivorceHQ.com/onlinebooks.html
4. Humor Adam and Eve had an ideal marriage. He didn't have to hear about all the men she could have married, and she didn't have to hear about the way his mother cooked..     - Unknown
5. Welcome to the following new         Attorneys, Mediators, Therapist/Counselors and Divorce Services members. Alaska     Attorneys         Pradell and Associates - Anchorage Arizona     Mediators         Affiliates In Mediation - Scottsdale California     Attorneys         Mediate For Peace - San Rafael         Paul Ligda - Vallejo         Mediation Offices of Andrea M. Eichorn, PC - Oakland         Law Offices Of Yvette Durant - Truckee         Law Offices of James Jones - Huntington Beach         Hosford & Hosford - Tustin         Curry & Westgate - Stockton     Mediators         Law Offices Of Yvette Durant - Truckee         Larry Stone, MFT - Pinole         Mediation Offices of Andrea M. Eichorn, PC - Oakland         Mediate For Peace - San Rafael     Therapist/Counselors         Larry Stone, MFT - Pinole Connecticut     Attorneys         Law Offices of Attorney Harvey L. Levine - New Britain         Law Offices of Linda K. Bertolette - West Hartford Florida     Attorneys         Kelli S. Beal, P.A. and Beal Mediation Services - Vero     Mediators         Kelli S. Beal, P.A. and Beal Mediation Services - Vero Hawaii     Mediators         Dispute Prevention & Resolution - Honolulu Illinois     Attorneys         The Muller Firm LTD - Chicago Kansas     Attorneys         Louis S. Wexler, PA - Overland Park Maryland     Attorneys         Stanley L. Rodbell, JD, LCSW - Columbia Massachusetts     Attorneys         Alan J. Pransky, Attorney at Law - Dedham         Laurie Mullen, Attorney-At-Law - Fall River         Law Offices of Steven Ballard - Wellesley         Law Offices of Susannah L. Brown - Pembroke     Mediators         Priscilla Mahoney, Mediator - Rockland Michigan     Attorneys         Law Offices of Jannelle J. Zawaideh - Southfield Minnesota     Attorneys         Hellmuth & Johnson, PLLC - Eden Prairie         Law Office of Glen A. Norton - Maple Grove New Jersey     Attorneys         Kelleher and Moore - Somerville         Musulin Law Firm - Mount Holly         Klauber & Klauber, LLP - Ocean     Mediators         Musulin Law Firm - Mount Holly         BeyondWinWin.com New York     Divorce Services         Mark S Scuderi CDFA - Rochester     Mediators         BJ Mann Mediation Services - Rochester Texas     Attorneys         Steven W. Valikonis - Richmond     Mediators         Steven W. Valikonis - Richmond Utah     Mediators         Gerrard Mediation - Sandy Vermont     Mediators         A Better Divorce
To find an ATTORNEY in your state go to: www.divorcehq.com/attydir.shtml To find a MEDIATOR in your state go to: www.divorcehq.com/mediatordir.shtml To find OTHER DIVORCE RELATED SERVICES such as Family counselors and Therapist, Divorce Planners, Financial Planners, Paralegals and Accountants go to: www.divorcehq.com/servicedir.shtml To find Collaborative Organization in your state go to: www.divorcehq.com/collaborative_orgs.shtml To find a SUPPORT GROUP in your state go to: www.divorcehq.com/spprtgroups.shtml
Remember, we are not attorneys, therefore we can not answer legal questions. If you have a legal question, visit our Attorney, Mediator or Service Directories for the appropriate professional in your state.