Domestic Support Obligations and Bankruptcy

Bankruptcy of an ex-spouse after the entry of a divorce decree (the dissolution of a marriage) can have substantial implications of obligations owed by that ex-spouse to you.  I’ve written a post regarding domestic support obligations in Chapter 7 as compared to Chapter 13 bankruptcy and I encourage your to click over and read it since I am not going to go into details here.  What I do want to reiterate here is that it is important to know how child support, alimony (maintenance) and equitable distributions of assets are treated in bankruptcy.  

In order to insure you do not end up getting paid only a percentage of what is owed to you from distribution of marital assets, be sure to get your share of assets right away rather than allowing for payment over time.  The most common example is where one party wants to keep the marital residence after the divorce is final.  They agree, then, to pay their soon to be ex-spouse a set number of dollars of the equity of the house over time in exchange for retaining the house.  Later they go into Chapter 13 bankruptcy and suddenly, you only get 10% or less of what’s owed to you and they get to keep the house. 

As hard as it may be, the more financially sound thing to do is to insist of the property being sold or refinanced and realize your share BEFORE ever quitting your interest in the property.  Also, just because something is called “child support” or “alimony” does not make it non-dischargeable.  The bankruptcy court can make its own determination based on the facts of the case as to whether it is actually an equitable distribution of property under the guise of alimony or child support, so it is risky to try and realize your share of equity by increasing child support or getting alimony.  

Keeping it cool

It is so well-known that it is almost cliché that divorce is one of the most stressful experiences a person can undergo. This is because something is being ripped apart that was bonded together on every level. Both parties end up with really raw wounds and feeling vulnerable because their life has so drastically changed. Now, it is human nature to want to attack or hurt the other party at times in this process and sometimes that comes out in the courtroom (see my prior post on this). Other times, though, one of the parties does not even realize they are raising the heat of the divorce.

Today’s world of Facebook, Twitter, Google+ (and I suppose some folks still use MySpace) provides a ton of information to total strangers. In this oddly electronically exhibitionist environment, many people post or tweet comments about their soon to be ex-spouse without even considering the ramifications. At the most simple level, those comments are very capable of getting back to the estranged wife or husband and just fueling the hurt and anger. The more hurt and anger that exists in the divorce context, the less likely contested matters will get resolved. Now, that is fine with most lawyers because it insures a steady supply of work and income. However, it harms both parties because of the expense and because the wounds are made deeper rather than healing.

On the more complex level, your posts and tweets can be used as evidence in a divorce hearing. They can be introduced because they are an admission by the party that made the comment. All the attorney has to do is authentic the post or tweet by asking you on the stand, “Do you recognize this comment? Did you make this comment?” and you are toast. So, resist the urge to express yourself. Return temporarily to the olden days where people got their gossip the old-fashioned way through pure speculation rather than providing it directly with Facebook, Twitter and Google+ (sorry MySpace, I know no one who uses you). Keep the temperature of the divorce cool so that the damage is minimized and the chance of healing optimized.

Lawyer Tactics in Divorce: The attorney fee correlation

It has been awhile since I posted anything, and this one deserved to be said again:

The best paid divorce lawyers are the ones that get very aggressive, and downright hostile sometimes, towards the soon to be ex-spouse. They use a harsh tone of voice and demeaning terms whenever they are in court or even in mediation (at least when their client is watching). This is an odd thing on the surface since judges tire of such antics and are not swayed by emotional ploys. They are far more concerned in finding some reasonable solution than figuring out which of the spouses is the most messed up (by the way, they assume you are pretty much just as messed up as whomever you are divorcing, just in a different way). It is an even greater oddity in mediation. Such tactics practically guarantee that negotiations will fail.

So, why do these lawyers resort to such psychological assaults? Well, the most cynical answer is that it pays! People in divorces are likely at the angriest point in their lives and all that anger is focused on the one person they are convinced has ruined their life. And yet, they are now separated from the object of their wrath and under the scrutiny of the court so that they cannot cut loose on the other party as they would like to. Instead, they get the vicarious release of seeing their lawyer say hurtful, nasty things – AND IN PUBLIC TOO! It becomes worth every penny of the $250 to $300 an hour fee (not my fee, I’m talking about the top charging lawyers here). And, since negotiations break down, they get to see the show over and over again at the court’s motion hour. That is, until the money runs out. Suddenly the tune changes and it is time to either come up with another large retainer or begin to settle for less that destroying your spouse’s entire life.

When it is all said and done and the money that would have paid for your children’s college has been spent – what it left? Nothing was really resolved and there are a whole set of fresh injuries to nurse. So, if you want an expensive divorce – get an aggressive attorney. If, however, you want to get on with your life and experience some semblance of peace – find a lawyer that believes in resolving conflict rather than profiting from it.