Chapter X Bankruptcy and Domestic Relations Law

• Jurisdiction: United States

X. Bankruptcy and Domestic Relations Law

A. Introduction

As a general rule, federal law does not get into issues of domestic relations. We leave that to the states. Still, it might simplify life for everybody if the bankruptcy court was built next door to the divorce court. Divorce is a factor in lots of bankruptcies. The divorce court faces the task of sorting out property and liabilities, which is a sort of bankruptcy job. The bankruptcy judge does not grant divorces.

It is easy to imagine a case where both spouses file for bankruptcy together while their divorce case is pending, or where they file for divorce while their bankruptcy case is pending. Perhaps of greater importance, we can imagine the case where just one spouse files for bankruptcy while the other is seeking to enforce a domestic obligation. In any of these cases, the bankruptcy court and the divorce court have to work together. In this section, we outline some of the most important issues they face.⁵³

This is another of those areas in which Congress made many changes in 2005. Some of the changes are cosmetic, while others alter the substance of the law, virtually always in the...