Vol. 7, No. 4, Pg. 24. Practicing Domestic Law Under the Bankruptcy Reform Act.

• Author: By Jane Harris Downey

South Carolina Lawyer

1996.

Vol. 7, No. 4, Pg. 24.

Practicing Domestic Law Under the Bankruptcy Reform Act

24PRACTICING DOMESTIC LAW UNDER THE BANKRUPTCY REFORM ACTBy Jane Harris DowneyThe ultimate goal of the indi- idual debtor is to obtain a fresh start. Through bankruptcy, the debtor may attempt to discharge certain obligations to the non-filing spouse or child. Therefore, along with tax and probate considerations, the parties should consider the impact of bankruptcy on a domestic agreement or order.

For instance, if on August 22, 1995, Wilma obtained an order in family court for Harry to pay her $5,000 for the joint Visa bill, which has charges for clothes, a dining room table and Carolina Panthers tickets, and on September 10, 1995, Harry filed a chapter 13 bankruptcy petition in order to discharge the payment, what happens to Wilma? Does it matter if on October 19, 1995, the bank filed a motion against Wilma to proceed against her, and in settlement, Wilma, who is judgment proof anyway, assigned Visa her right to collect the $5,000 from Harry?

PREPARING THE CREDITOR AND SPOUSE FOR BANKRUPTCY

When a domestic case is commenced, the parties will want to consider filing a lis pendens to assist in protecting their interests in any property divided by agreement or court order. This may assist the non-filing spouse in establishing a secured claim in future bankruptcy proceedings. Once the bankruptcy case has been commenced, the non-filing spouse should consider filing other forms, such as a proof of claim, which will give notice to the debtor and other parties of the spouse's claim against the debtor.

Additionally, the non-filing spouse will want to file a notice of appearance, which will ensure notification of pleadings affecting the creditor. Such notification, and periodic review of PACER (a computerized docketing system), will identify allies to join in the spouse's motions, such as a motion to dismiss, motion to appoint a trustee or motion to convert. Getting third parties to join in a motion may build credibility with the bankruptcy court, compared to pursuing a motion on his or her own, which may look like a disguise for a domestic squabble. It can also reduce the spouse's attorney's fees by sharing the litigation costs among multiple parties.

Also, the non-filing spouse will want to compare the bankruptcy schedules and statements with the financial declaration and other documents on record with the family court that reveal assets of the debtor. The creditor should attempt to do so prior to attending the first meeting of creditors so...