When Bankruptcy Meets Divorce

Just over two years ago, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, which became effective Oct. 17, 2005. If you are getting divorced, this new bankruptcy law could concern you. Reason: While you may not realize it, in this country, our high divorce rate and bankruptcy commonly intersect.

Here’s how. Until the enactment of the BAPCPA, the bankruptcy process was seen by some, and used by many, as a tool to permanently evade (or, to use bankruptcy terminology, “discharge”) family obligations foisted upon them by agreement or court order after a marital dissolution. Plus, once a person filed a bankruptcy petition–for liquidation under Chapter 7 or reorganization under Chapter 13 (or, less commonly, Chapter 11)–he gained the protection of an “automatic stay,” preventing creditors from taking any actions against him, his income or his property to collect their debts.

If the “debtor’s” income was less than the sum needed to maintain his lifestyle, including debt service, he would generally opt for the Chapter 7 liquidation, taking advantage of whatever homestead and property exemptions his state allowed, thus protecting his assets from creditors. If any nonexempt property existed, the bankruptcy trustee would liquidate it to pay secured creditors first, with unsecured creditors, such as ex spouses (who lacked collateral or guarantees) at the back of the line.

While Chapter 7 liquidation was not a means to avoid a mortgage or shirk taxes secured by liens, it did provide the debtor a clean slate, free from pesky consumer debt–credit cards, loans from friends and family, legal or medical bills–and whatever equitable distribution payments he couldn’t comfortably afford. Plus, if a person happened to live in Florida, Iowa, Kansas Oklahoma, South Dakota or Texas, he could really make out like a bandit because these states had (and still have) limitless homestead–and generous property–exemptions.

(more…)

Georgia Divorce Frequently Asked Questions

What is marriage?
Traditionally marriage is a civil contract that exists between two people of the opposite sex. In the past, marriage was considered to be between people of opposite genders. However, the times are changing, and same sex marriages are now being considered in some states. Only in very few states are same sex marriages actually legal. To be "capable of contracting", both persons typically must be of age (18), or have consent from a parent. Different states have different statutes on the "legal age" for marrying. The individuals must be unmarried and not divorced within the past six months. 

What is common law marriage?
Common law marriage is only allowed in a small number of states. In a common law marriage, the individuals do not have a marriage ceremony and never obtained a marriage license to get married. Basically, a common law marriage requires an arrangement between the people (of opposite sexes) to act as husband and wife. This agreement can either be made by conduct or by words. The people involved must represent themselves (act in a way to appear to be married) to others as being married. For example, if they use the same name, call each other husband and wife, have children together, open joint bank accounts, and live at the same residence, all of these "indicia" of being married may be sufficient. 

(more…)

Who Must Pay Child Support FAQ

Is a father who never married the mother still required to pay child support?

The short answer to this question is yes. When a mother is not married, however, there can sometimes be confusion about who the child’s legal father is for purposes of support. An "acknowledged father" is any biological father of a child born to unmarried parents for whom paternity has been established by either the admission of the father or the agreement of the parents. Acknowledged fathers are required to pay child support. Additionally, a man who never married the child’s mother may be presumed to be the father if he welcomes the child into his home and openly holds the child out as his own.

(more…)