Divorce During Bankruptcy: Possible or Not?

Is it possible to get divorced while one or both spouses are in the midst of a bankruptcy proceeding?  Yes, but there are limitations.

Those familiar with bankruptcy law, which is detailed in Title 11 of the United States Code, know that upon the filing of the bankruptcy application, an “automatic stay” goes into effect.1  In short, the party applying and creditors are prohibited from taking any action that affects the filer’s bankruptcy estate since doing so would prejudice the bankruptcy trustee’s right to manage the bankruptcy estate.  See id.

There are some exceptions to that apply to divorce.2  The automatic stay does not apply to “commencement or continuation” of any or all of the following:Id.

  1. Suit for dissolution of the marriage (i.e., the divorce), “except to the extent that such [suit] seeks to determine the division of property that is property of the [bankruptcy] estate (emphasis added);
  2. An order that establishes or modifies a domestic support obligation (e.g., child support or post-divorce spousal maintenance);
  3. An order concerning child custody or visitation;
  4. An income withholding order for income that is property of the bankruptcy estate for payment of a domestic support obligation when withholding is by judicial or administrative order or statute; and,
  5. An order regarding domestic violence.

Succinctly, divorce is possible during bankruptcy along with orders for child custody, visitation, domestic support obligations, and income withholding ordered by the court, for example, for child support.  See id.  Division of the marital estate is not possible during bankruptcy, but for the limited exception listed in item 4, above. See id.  Otherwise, division of the marital estate would have to occur in an ancillary proceeding after the bankruptcy concludes.  See id.

Author Jim Cramp is a retired active duty colonel and the founder and principal attorney at the Cramp Law Firm, PLLC.  The firm provides a spectrum of family law-related services to clients in the greater San Antonio region, across the United States and throughout the world.  The firm specializes in Federal Civil Service and Military Divorce matters.

 Note 1 11 U.S.C. Section 362, Automatic Stay.

 Note 2 11 U.S.C. Section 362(b) (listing exemptions to the automatic stay).