Divorce can be emotionally and financially draining, particularly when the parties are also struggling with debt. Adding bankruptcy to the divorce mix may help people tackle debt issues, but it also poses unique questions.
One common concern for bankruptcy filers is whether divorce lawyer fees are dischargeable in bankruptcy. In brief, if the attorney’s fees are not connected to alimony or support payments, they may be dischargeable.
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After a divorce, alimony and child support payments cannot usually be discharged in bankruptcy. However, divorce lawyer fees that were incurred during the divorce process may be discharged.
Lawyer fees for one party in a divorce case may be apportioned by a judge to the other spouse. In the event that one spouse is obligated to pay the other’s fees, the paying spouse’s ability to discharge these fees depends on a few factors:
Thus, the key distinction is whether the divorce lawyer fees were granted as part of a property settlement or a support obligation. The line between these two isn’t always clear, so a bankruptcy judge may take several factors into account when making this determination.
If you have a significant amount of debt from overdue divorce attorney’s fees, bankruptcy may offer an efficient form of debt relief.
Even if you cannot discharge the divorce lawyer debt, you may be able to eliminate other forms of unsecured debt, allowing you to have extra cash to meet your divorce obligations.
To learn more about your legal options, contact a local lawyer today.