DIVORCE AND BANKRUPTCY DO NOT MIX

DIVORCE AND BANKRUPTCY DO NOT MIX

| Sep 8, 2014 | Bankruptcy |

In the recent case of Okke v. Okke, 2014 WL 3578599 (Bankr. W.D. Mich. 7.17.14), the debtor’s ex-wife was ordered to pay the debtor $500 in damages and $9,000 as reimbursement of the debtor’s attorney’s fee for her violation of the automatic stay. In this case the debtor’s judgment for divorce required his ex-wife to turn over certain property belonging to the debtor. The ex-wife refused to turn over these items and the debtor filed an adversary proceeding in the bankruptcy court against her to get them back.

The bankruptcy court granted partial summary judgment in favor of the debtor and ordered the ex-wife to return the contested items. She returned everything but the debtor’s fish tank and fish. Instead of returning the fish tank and fish, she sold the tank and fish to her brother for $500. She told the court that she thought she had a security interest in these items and could hold them as security to ensure that the debtor makes the support payments to her that are required in the divorce case. The bankruptcy court found that the divorce judgment did not give her a security interest in the fish tank and fish and even if it did, it did not authorize her to enforce the supposed security interest by selling these items. The court further found that the debtor wilfully violated the automatic stay by selling property of the estate knowing that the debtor was in a Chapter 13 bankruptcy case and knowing that there was a court order compelling her to turn these items back to the debtor.

When it comes to divorce and bankruptcy, it is taking a risk to proceed on your own. The intricacies of bankruptcy law are too complex for the average person to handle. It is always best to go to attorneys who are experts in their fields. If you or your spouse are contemplating bankruptcy or a bankruptcy case was filed by a former spouse, you should consult with the attorneys at Laura Margulies & Associates, LLC. We have helped thousands of people through the bankruptcy process and can help you address all of your concerns. To learn more about our firm visit our web site at www.law-margulies.com.