1) INTRODUCTION

 

2) WHO'S FILING? 

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The Debtor’s Legal Spousal Relationship in Bankruptcy

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a) Spouses filing together

i) Consolidated cases

ii) Divorced spouses cannot file together

b) Spouses filing separately

i) Under different chapters

ii) Joint cases can be severed (bifurcated)

c) One spouse filing alone

i) Why file alone?

ii) Effect on and reporting requirements of non-filing spouse

d) Conflicts of interest and confidentiality

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3) FEDERAL COURT v. STATE JURISDICTION

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a) The domestic relations exception

b) Bankruptcy court jurisdiction

i) Abstention and remand

(1) Marriage dissolution

(2) Actions affecting property

(a) Property settlement

(b) Alimony

(c) Child support

c) Application of State Law in Bankruptcy Court

i) Common Law States

ii) Community Property States

iii) Opt-In States

iv) Separate Property

d) Relitigating issues

i) Claim preclusion

ii) Issue preclusion

iii) Judicial estoppel

iv) Rooker-Feldman Doctrine

 

4) WHAT IS THE BANKRUPTCY ESTATE?

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5) MARITAL PROPERTY

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a) What marital property becomes part of the bankruptcy estate?

i) Debtor’s property rights during pendency of divorce

ii) How states treat marital property

(1) Common Law

(2) Community Property

(a) Joint Management

(b) Sole Management

iii) Separate Property of filing spouse

iv) Property of Non-Filing Spouse

(1) Jurisdiction over property of non-filing spouse

v) 180 day rule

vi) Tenancy by the Entireties

vii) Personal vs. Entity Ownership

(1) Stock in corporation

(2) Sole proprietor

(3) Partnership property

viii) Property Divided Pre-petition

ix) Fractional interests

(1) Trustee’s right to sell (see exemptions)

(2) Co-owner’s right to purchase

x) Particular Properties

(1) Child Support

(2) Joint Tax Refund

(3) Income

(4) ERISA Benefits and Spendthrift Trust Interests

(5) Support from prior spouse

(6) Property owned in joint tenancy

(7) Professional degrees

(8) Social security and disability payments

b) Application of the automatic stay

i) When bankruptcy case is filed first

ii) When domestic relations case is filed first

(1) Chapter 7 case

(2) Chapter 13 or Chapter 11 cases

(3) Particular actions

(a) Marriage dissolution

(b) Interim orders

(c) Actions affecting property

(d) Paternity

(e) Modify support

(f) Child custody and visitation

g) Domestic violence

h) Withhold income (incl. property of estate)

(4) Exceptions

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iii) Duration of the stay

iv) Application to be employed as special counsel for domestic relations matters

v) The Co-Debtor Stay in Chapter 13

(1) Protects non-filing spouses

(2) Consumer debts (not tax)

vi) Obtaining relief from the stay

(1) Who seeks relief?

(2) Timing

(3) Remedies for violation of the stay

(4) Comfort orders

(5) Modification of decree, support obligations

c) Exemptions

i) Exemption schemes

(1) Federal

(2) State

ii) Timing

(1) 2-year rule: which state (or federal) scheme applies?

iii) Assets owned as tenants by the entireties (§ 522(b)(2)(B))

iv) Homestead

(1) Residence requirements

(a) Intent to return

(2) Sale

(a) Exemption of proceeds

v) Objection to exemptions

(1) Timing

(2) Who has the right to object?

(3) No ownership interest = no exemption

(4) Exempt assets recoverable for support claims

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6) THE MEANS TEST 

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a) Income of non-filing spouse

b) Support payments as income

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7) DISCHARGEABILITY OF MARITAL DEBT

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a) Concurrent state/federal jurisdiction to determine dischargeability

b) Differences among Chapter 7, Chapter 13, Chapter 11

c) Discharge of debt owed to third parties

i) Affect of hold harmless agreements

d) Discharge of obligations between the spouses

i) What is a “domestic support obligation”?

(1) Factors courts consider

e) Community discharge

i) There is no “community debt”, only community property

ii) When one spouse’s discharge protects community property

f) Dischargeability of particular spousal obligations

(1) Alimony

(2) Child support

(3) Support payable to government agency

(4) Property settlement

(5) Attorney’s fees

(6) Guardian ad litem fees

(7) Medical expenses for birth

(8) Palimony

(9) Parental liability for child’s acts

(10) Postpetition debt

(11) Debts incurred by fraud

(12) Willful and malicious injury

(13) Defalcation/fiduciary duty

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8) CHAPTER 13 ISSUES

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a) Determining disposable income

b) Support arrearage as a separate class

c) Priority status of domestic support obligations

d) Objections to confirmation by trustee or DSO creditor

i) Preclusive effect of failure to object

e) Certification of current status for discharge

f) Intervention by state agencies in collection of support

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9) CHAPTER 11 ISSUES 

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10) AVOIDABLE TRANSFERS

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a) Preferential transfers

b) Fraudulent transfers

i) As to third party debts

ii) As between spouses

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11) AVOIDANCE OF LIENS CREATED INCIDENT TO DIVORCE DECREE

 

Avoidance of liens created incident to divorce decree

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12) CLAIMS 

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a) Non-debtor former spouse claim

b) When property division has not taken place

c) Late filed claims and unfiled claims

d) Reaffirmation agreements

e) Creditors entitled to recover community property

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13) EFFECT OF CASES NOT COMPLETED

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a) Dismissal

b) Challenge to discharge

c) Failure to file DSO certificate

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14) EFFECT OF REFILING

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a) Automatic stay restriction

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15) BEST PRACTICES

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a) Which comes first, bankruptcy or divorce?

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