Dealing With Bankruptcy and Divorce in Texas
Divorce can often be a big factor when people are making the tough decision whether or not to file for bankruptcy. Sometimes, divorce is the cause of the financial hardship leading the individual toward bankruptcy. Other times, individuals need to know what the requirements are when it comes to divorce settlement proceedings if you already know you’re going to file for bankruptcy. A recent case here in Dallas, Texas demonstrates that failing to disclose your intention to file for bankruptcy during the course of divorce proceedings can make you liable for those divorce-related debts such as alimony on the basis of fraud.
In Anderson v. Wendt (In re Wendt), Adv. No. 05-3941 (Bankr. S.D. Tex. 2007), the Court found that Mr. Wendt was obligated to inform the plaintiff, Mrs. Wendt, about his intentions to file for bankruptcy upon entering into alimony settlement negotiations since he knew at the time of those negotiations that he planned to file for bankruptcy. His silence about intending to file for bankruptcy served as a knowingly false representation upon which the plaintiff relied. As a result, the Court ruled that the alimony obligations were not dischargeable during his bankruptcy proceedings.
Those entering into pre-nuptial agreements or post-nuptial contract negotiations may well want to consider including a clause in the contract stating exactly what the parties intend to do when it comes to discharging any debt in future bankruptcies. This could go a long way toward proving whether or not a client intended to file for bankruptcy at the actual time of divorce proceedings. While it wouldn’t be exhaustive in and of itself, it could certainly be a piece of evidence carrying some weight.
Need Some Advice About Bankruptcy? Talk to a Bankruptcy Attorney
Experienced bankruptcy attorneys like those of us here at Allmand Law Firm PLLC can advise you what your obligations are when it comes to divorce and bankruptcy. Bankruptcy can be a strong lifeline for those who are going through rough economic times, but you do need to know how the laws apply to your particular situation–something bankruptcy attorneys who regularly deal with similar circumstances can help you with. It’s never a good idea to try and walk through this process alone, especially when adding a more complicated situation like divorce to the equation. Please consider contacting a bankruptcy attorney today–many will get you started with a free case evaluation. Attorneys experienced in practicing bankruptcy law have the skills and expertise to help you get answers to your burning bankruptcy questions!