Does Filing Bankruptcy Excuse You From Court-Ordered Divorce Fees?
Attorney's fees can cause a great deal of post-divorce financial stress, especially if the court has ordered an ex-spouse to pay the legal fees of the other party. If the divorce required lengthy litigation, the attorney's fees might have become a significant expense. If an ex-spouse later files for bankruptcy, the bankruptcy proceedings might affect the terms of the divorce. Either spouse, whether the party filing for bankruptcy or the other party, may need to consult with a bankruptcy attorney for personalized advice.
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Fees Tied to Legal Issues
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According to the New Hampshire Bar Association, the discharge of court-ordered attorney's fees often depends on the legal issue by which each party incurred those fees. If a party has an obligation to pay legal fees incurred while litigating a divorce-related debt or obligation that is dischargeable in bankruptcy, the related fees are likely also dischargeable. If the ex-spouses incurred attorney's fees during litigation of a debt or obligation that is not dischargeable in bankruptcy, however, bankruptcy proceedings might not discharge those fees. Accordingly, the first step in determining whether bankruptcy might discharge particular fees is to characterize the legal issue through which the spouses accumulated those fees.
Debts Dischargeable in Bankruptcy
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Consumer bankruptcy often results in the renegotiation or elimination of many types of debts under the oversight of a U.S. bankruptcy court. Only some divorce-related debts are dischargeable in bankruptcy law. The divorce-related debts that a court may discharge vary between Chapter 7 bankruptcy and Chapter 13 bankruptcy. In a Chapter 7 case, for example, divorce-related debts that aren't spousal or child support are often non-dischargeable. In a Chapter 13 case, however, the bankruptcy court might allow discharge of a property settlement or another non-support debt assigned to an ex-spouse by the couple's divorce settlement or decree. If a bankruptcy court discharges specific divorce-related debts, the legal fees incurred during litigation of those debts might also be discharged.
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Debts Not Dischargeable in Bankruptcy
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According to the American Bar Association, a bankruptcy court usually can't eliminate court-ordered child support or alimony obligations during bankruptcy proceedings. Non-dischargeable support debts also include arrearages owed for past-due alimony or child support payments. If a court order requires an ex-spouse to pay the litigation fees of the other spouse accrued while they negotiated child support or alimony during their divorce, the bankruptcy court likely can't discharge that obligation as part of a bankruptcy filing in the future.
Other Spouse's Legal Options
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If a bankruptcy court discharges divorce-related debts owed by an ex-spouse, the other ex-spouse may need to return to family court and request an adjustment to the terms of the previously finalized divorce. The party returning to court would need to convince a judge that the discharged debts, including divorce fees, have significantly affected her financial situation. If a party can prove a significant change in financial circumstances, the judge might agree to increase the amount of court-ordered support to compensate for the increased financial strain caused by the other party's bankruptcy proceedings. An ex-spouse requesting the modification of a support order may want to consult with a family law attorney for help.
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