Bankruptcy & Family Law Attorneys in Houston Help Clients Understand Divorce Decrees Under New Bankruptcy Law
The Bankruptcy and Family Law Attorneys Explain Importance of Wording in Divorce Decree when Seeking Spousal Support or Alimony
HOUSTON - Among Houston's leading debt consolidation, consumer bankruptcy and family law legal firms, Busby & Associates helps inform clients of ever changing laws and the most effective manner of working within them, in order to ensure the best possible outcome. The company's educational approach is proving successful for its firm and its clients.
Most recently the company reported that new bankruptcy law makes non-support obligations from a divorce or separation non-dischargeable in a chapter 7 bankruptcy. 11 U.S.C. 523(a)(15). A debt that is non-dischargeable means that an ex-spouse retains responsibility for repayment.
According to Attorney Michael G. Busby Jr., the discharge in a chapter 13 case is somewhat broader than that of a chapter 7. Debts dischargeable in a chapter 13 but not in chapter 7 include debts arising from property settlements in divorce or separation proceedings. While in a chapter 13 the debtor spouse would pay on the settlement, generally the payout would be less than dollar for dollar. In fact, in the majority of cases it would be pennies on the dollar.
"Understanding these differences is very important for our clients. The way in which the divorce decree is written can reduce the chance that the bankruptcy court will discharge the debt," said Busby.
"You can reduce the likelihood that the debt will not be discharged by labeling the debt payments as either 'support' or 'alimony' in the decree. This usually applies in both chapter 13 and chapter 7," he added.
The Busby & Associates legal team underscored the necessity of having an attorney, who practices in both bankruptcy and divorce court, draft the final divorce decree in order to ensure that property interests are protected.
To learn more or to contact one of the legal advisors call 1-(866)-912-9832 today.