Bankruptcy in divorce: The litigation tactic of the angry spouse

• Published date: 01 January 2023
• Author: Angel Semerdzhiev
• Date: 01 January 2023
• DOI: http://doi.org/10.1111/fcre.12698

STUDENT NOTES

Bankruptcy in divorce: The litigation tactic of the

angry spouse

Angel Semerdzhiev

Maurice A. Deane School of Law at Hofstra

University, Hempstead, New York, USA

Correspondence

Angel Semerdzhiev, Maurice A. Deane School

of Law at Hofstra University, 121 Hofstra

University, Hempstead, NY 11549 USA.

Email: asemerdzhiev1@pride.hofstra.edu

Abstract

A matrimonial proceeding on its own is complex and can have

far-reaching implications. Add in a spouse filing for bankruptcy

in the midst of the proceeding, and the process becomes even

further complicated and quite possibly hostile. This Note ana-

lyzes the bad-faith tactics of debtor spouses filing for bank-

ruptcy in the middle of a divorce proceeding and proposes an

amendment to the Bankruptcy Code that permits bankruptcy

courts to dismiss bad faith petitions before they negatively

impact divorce proceedings.

KEYWORDS

automatic stay, bad faith, bankruptcy, community property, debtor

spouse, dissolution of marriage, divorce, good faith, lackof good

faith, marital assets, matrimonial proceeding, unsecured creditor

Key points for the family court community

•Spouses filing for bankruptcy can file either jointly or

separately.

•When bankruptcy proceedings commence, an automatic

stay on the distribution of assets is created.

•A party may file a motion to the Bankruptcy Court to ter-

minate or modify the automatic stay if the court finds

sufficient reasons.

•The Non-Debtor spouse takes on the position of an

unsecured credit holder.

•Divorce proceedings begin with a preliminary injunction

that precludes spouses from selling off assets or spend-

ing marital funds.

DOI: 10.1111/fcre.12698

© 2022 Association of Family and Conciliation Courts.

Family Court Rev. 2023;61:189–202. wileyonlinelibrary.com/journal/fcre 189