Agreed Divorce

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

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Texas ranks first with 9.95% or 215,818 of the nation's 2.168 million military retirees living in the Lone Star State.  The top five States with the largest military retiree populations are as follows:

1. Texas: 215,818
2. Florida: 202,840
3. Virginia: 157,821
4. California: 154,736
5. Georgia: 99,645

Closer to home, approximately 18% or 38,997 of Texas' military retirees live in the San Antonio region as measured by those living within the "782" zip code.  If the "781" zip code is added, which includes military retirees in Comal, Guadalupe and Wilson Counties (among other counties in "781"), the greater San Antonio region then accounts for 26.

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I recently gave a presentation on the military's new Blended Retirement System (BRS) at the Family Law Bar Association - San Antonio.  The paper I wrote is on our website under the "Forms" tab.

A lump sum option may be selected by a Servicemember within 90 days of retirement. The first lump sum option is a 25% lump sum with 75% of regular monthly retired pay.  The second is a 50% lump sum with 50% of regular monthly retired pay.  The lump sum / reduced retired pay extends from retirement until the Servicemember's full Social Security retirement age, which for most is 67 years of age.  At full Social Security retirement age, military retired pay returns to its full amount. 

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Yes, it can.  The requestor or movant must file a Motion to Modify Post-Divorce Spousal Maintenance in the Court that made the initial order.  Procedures for filing an original suit apply, which means the former spouse receiving maintenance must be served with citation.  At an evidentiary hearing, the movant bears the burden of proving that a material and substantial change has occurred such that the movant no longer can longer afford to pay the Court-ordered amount.  In proving that a material and substantial change has occurred, the movant must prove the facts and circumstances that existed at time of the original order and the facts and circumstances that exist now.
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Some servicemembers left the service by taking Voluntary Separation Incentive (VSI) pay or Special Separation Bonus (SSB) pay and later returned to military duty and qualified for either an active duty or reserve component retirement.  So, what happens to the VSI or SSB payments the servicemember received?

DFAS will recoup the amount of VSI or SSB it paid.  Generally, recoupment starts about 3 months after the now retired member begins to receive retired pay.  The recoupment rate is 40 percent of the retired member's retired pay per month until the full recoupment has been satisfied.  Retired members may apply for a hardship reduction in the amount recouped.

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Yes, when DFAS tells a former spouse that a clarification order is necessary to receive former spouse retired pay, the ex-spouse/Servicemember "must" be served with notice of the clarification proceeding.  The former spouse cannot simply claim the Court has jurisdiction over the Servicemember because of a prior proceeding (e.g. the divorce decree).  In fact, the clarification proceeding requires that jurisdiction over the Servicemember be established (one might say, "re-established") through one of the three methods specified in the Uniform Services Former Spouse Protection Act (USFSPA), which are as follows:

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The answer to the question of whether a former spouse's retired pay payments can be stopped is, "it depends."  The Dep't of Defense regulation governing this subject matter states the following:

• "Unless the court order specifies otherwise, payments will stop upon [DFAS's] receipt of notice of the death of either party.  Payments will be prorated for the month of death of either party."   See Note 1, below.
• "Unless the court order specifies otherwise, retired pay award payments will not stop upon [DFAS's] receipt of notice of the former spouse's remarriage.

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The cap for "net resources" when calculating guideline child support increases from $8,550 to $9,200, effective September 1, 2019.  The Office of the Attorney General Child Support Division (OAG) recently announced the coming change. 

OAG manages the child support system for Texas.
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After a military divorce, when a Former Spouse predeceases the Servicemember, the Former Spouse's share of disposable retired pay returns to the Servicemember.¹  Former Spouse retired pay cannot be "sold, assigned, transferred, or otherwise disposed of (including by inheritance).²"

Ironically, the same cannot be said for a Former Spouse's share of a Read more . . .

In the vast majority of cases, the answer to whether there is a "cap" to child support in divorce is, "yes."  The Texas Family Code caps "net resources" available for child support at $8,550.00.  In determining "net resources," the Family Code includes the following:

1. Wages, salary, commissions, overtime pay, tips and bonuses;
2. Interests, dividends, and royalties;
3. Self-employment income;
4. Severance pay, retirement benefits, Social Security benefits (other than Supplemental Security Income or SSI), and VA disability compensation.

In Texas, if one child is at issue (and assuming the paying parent has no other children from prior marriages or relationships for which that parent has a legal duty of support), child support is as follows:

1. One child: 20% of net resources, which equals $1,710.

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If your spouse is designated as your life insurance beneficiary, and you later divorce, the Texas Family Code establishes that your now ex-spouse will not be treated as the beneficiary of your life insurance policy, unless one of three conditions exist:¹

1. Your decree of divorce names the ex-spouse as the beneficiary of your life insurance policy;
2.  You re-designate your ex-spouse as your beneficiary after the divorce; or,
3.  Your ex-spouse is designated to receive your life insurance proceeds in trust for, on behalf of, or for the benefit of a child or dependent of yours or your former spouse.

The provision above does not apply to life insurance policies provided by the Federal Government.²  For example, if a Servicemember divorces, later remarries and neglects to name his new spouse instead of his ex-spouse as his Servicemember's Group Life Insurance (SGLI) beneficiary, the ex-spouse will receive the life insurance proceeds because that person is the named beneficiary.³

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