As a divorce lawyer practicing in Nassau County and Suffolk County on Long Island, NY, I see first-hand how financial problems are frequently the source of marital discord between spouses. Very often, we find that divorce proceedings and bankruptcy filings are often intertwined. Due to the relationship between divorce and bankruptcy, it is important to understand the inner-workings of both areas of law and how filing for bankruptcy during divorce proceedings may affect all of the parties involved. In particular, it is essential for non-debtor spouses to understand what support they are entitled to when a debtor-spouse files for bankruptcy.
Bankruptcy Does Not Discharge Child Support or Spousal Support in Long Island NY Divorce
The general concept of enabling a person to file for bankruptcy pursuant to the Bankruptcy Code is to provide a debtor with a “fresh start,” by essentially wiping the debtor’s slate clean. However, legislation, as well as case law, have provided that debts related to the enforcement of familial obligations, i.e. the payment of Child Support and Spousal Support, are non-dischargeable debts in bankruptcy proceedings. The non-discharge-ability of familial obligations is rooted in public policy considerations. The Bankruptcy Abuse Prevention & Consumer Protection Act (BAPCPA), which was enacted by Congress in 2005, provides reassurance to non-debtor spouses that they will be able to recover certain property and support owed to them by spouses declaring bankruptcy. The BAPCPA further intends to prevent debtors from shirking their familial obligations by opting to declare bankruptcy.
Bankruptcy Creates Estate for Debtor’s Non-Exempt Assets
With the filing of any bankruptcy petition, an estate consisting of the debtor’s non-exempt assets is created. In the event that a debtor files for bankruptcy during a pending divorce proceeding, state law must be consulted to determine if the non-debtor spouse holds any interest in the property of the estate. The non-debtor spouse must hold “an inchoate or contingent interest” in the property, otherwise, the filing of the bankruptcy petition by the debtor-spouse cuts off any interest in that property. In Re Hoyo, 340 B.R. 100 (Bankr. M.D. Fla. 2006). Conversely, the debtor’s right to receive property from the non-debtor becomes property of the debtor’s estate. Partial ownership with respect to property, such as joint tenancy, belongs to the estate of the debtor in a bankruptcy proceeding. Also belonging to the estate is any property acquired by way of inheritance, property distributed to the debtor through a settlement agreement with the non-debtor spouse, as well as property obtained through a final divorce decree within 180 days after the filing of a bankruptcy petition.
Debtor Must Pay Domestic Support Even in Bankruptcy
Upon the filing of a bankruptcy petition, any efforts or actions to collect debts owed to creditors are strictly barred by what is known as an “automatic stay.” The BAPCPA, however, provides exceptions to the automatic stay in that debtors must continue to meet any outstanding Domestic Support Obligations (DSOs). The Bankruptcy Code defines what constitutes as a DSO and establishes four elements that the obligation must meet to qualify as an exception under the BAPCPA.
Legal Definition of Domestic Support Obligations
the payee of the obligation is either a governmental unit or a person with a particular relationship to the debtor or to the child of the debtor
the nature of the obligation must be support
the source of the obligation must be an agreement, court order, or other determination
the assignment status must be consistent with Paragraph (D).
Non-Debtor Spouses Given Priority Over Most Other Creditors
In bankruptcy, non-debtor spouses who have met these requirements are given priority over most creditors when it comes to debt collection. Furthermore, these individuals’ claims are deemed non-dischargeable under both Chapter 7 and Chapter 13 of the Bankruptcy Code. The non-discharge-ability of these claims is dependant on whether the obligation is found to be “in the nature of support.” Federal bankruptcy law determines whether an obligation meets this particular standard.
A Few Factors Considered in Determining Nature of Support
Is the obligation is assumed?
What are the terms of a final divorce decree?
What is the earning potential of each party?
Is the obligation is considered rehabilitative to one spouse?
Is the obligation is subject to a contingency such as remarriage?
Are minor children are in need of support?
These are just some of the items the court may consider, among others.
Consider Implications of Bankruptcy on Divorce and Support Obligations
As divorce and bankruptcy filings are often intertwined, parties must understand the consequences that come along with opting to file for bankruptcy. It is particularly important to understand the relationship between bankruptcy filings and the obligation of a debtor to continue to meet their Domestic Support Obligations pursuant to the Bankruptcy Code. Such obligations are considered non-dischargeable debts in Chapter 7 and Chapter 13 bankruptcy proceedings.
Questions? Robert E. Hornberger, Esq. PC Can Help
The Nassau County and Suffolk Count Divorce Attorneys of Hornberger Verbitsky, P.C. have a great deal of experience representing both sides during a divorce with bankruptcy and have strong relationships with bankruptcy attorneys who deal with bankruptcy on a daily basis with whom we consult. If you have questions about your or your spouse’s bankruptcy and how that will affect your divorce, child support or spousal support, please give us a call at 631-923-1910 or fill out the short form on this page for a complimentary consultation and we’ll be happy to help.
As a Long Island Divorce Attorney and Child Support Attorney, I am often asked the question, “If I share custody of the children, do I have to pay child support?” or “Will I receive child support in a shared custody situation?” There is a common misconception in Nassau County and Suffolk County child support cases that there is no obligation to pay child support where two parties “share” custody or “share” equally in parenting time. Because the Child Support Standards Act is silent on the matter of shared custody, it is not surprising that this question has been litigated several times in the State of New York.
In 1998, the New York Court of Appeals formally recognized that the Child Support Standards Act does in fact apply to cases of shared custody. In the case of Bast v. Rostoff, the Court of Appeals attempted to reconcile a shared custody agreement with the Child Support Standards Act, as the lower court acknowledged, “[t]he concept of shared parenting time does not appear anywhere in the statute.” 91 N.Y.2d 723, 725 (1998). (more…)
On June 28, 2013, the Supreme Court, Appellate Division, Fourth Department made an interesting decision in regard to child support and the noncustodial parent that has implications for Divorce cases in Nassau County and Suffolk County Courts on Long Island, NY. In Leonard v. Leonard, the trial court granted the parents shared physical custody and the father sole legal custody. Also, under the trial court decision, the mother was responsible for paying child support to the husband, although he actually had a far more significant income than the mother. The mother appealed the entire decision, but the Appellate Division only ruled on the issue of child support.
It is typical for the noncustodial parent to pay child support to the custodial parent, where the custodial parent is usually the parent with whom the child spends most of his or her time. However, in Leonard, the father had sole legal custody, not sole physical custody and each parent spent an equal amount of time with the children. In the appeal, the court found that because both parents shared equal time with the children that the father should be viewed as the noncustodial parent, but only as it related to child support, stating: “It is well settled that in shared residency arrangements, where neither parent has the children for a majority of the time, the party with the higher income is deemed to be the noncustodial parent for purposes of child support.” Leonard v. Leonard, 2013 WL 3242643 at *1.
The father tried to argue that the above reasoning was based on cases where parents held joint legal custody, and that they did not apply because he had sole legal custody of the children. The court found that having sole legal custody does not increase the financial burden placed on the custodial parent when both parents share physical custody equally. Moreover, the court found that because there was already a significant gap between the incomes earned by both parents, that ordering the mother to pay child support would only increase this disparity. Based on the income of each parent, the equal amount of time the parents spent with the children, and in an effort to maintain a more equal standard of living for the children, the court held that for the purpose of child support the father was the noncustodial parent and is responsible for paying child support.
We’re Here to Help Your Long Island, NY Child Support Issues with a Free Consultation
The Long Island Divorce Attorneys at Robert E. Hornberger, P.C. are dedicated to keeping current on the latest rulings with respect to divorce and Child Support in Nassau County and Suffolk County courts and how those rulings can affect their clients. Call us at 631-923-1910 or fill out the short form on this page and we will be happy to demonstrate how we can help you during a free consultation.
Your Child Support on Long Island Questions Answered
As a Divorce Attorney on Long Island, I regularly counsel clients on issues of Child Support and Child Custody in both Nassau and Suffolk Counties.
Long Island Family Courts, under the jurisdiction of New York State law, have ruled that children are entitled to proper child support from their parents, even if the parents aren’t living together. In New York State, the standard passed by law requires a minimum amount of money paid to the custodial parent based on the gross annual income of both parties. The breakdown is then multiplied by the following percentages:
17% for one child
25% for two children
29% for three children
31% for four children
No less than 35% for five or more children
The basic child support obligation is then divided proportionately between the parents, based on their respective incomes. In order to make sure the custodial parent gets paid promptly, child support orders that payments be immediately withheld from the wages or other income of the obligated parent, unless there is some other type of agreement between the parties.
If a parent doesn’t pay, there are different punishments that can be implemented, including suspension of the parent’s driver’s license, an intercept of a tax return or lottery winning of $600 or more, and of course, obtaining a money judgment in court. In other circumstances, the state can freeze the obligated parent’s bank account, IRA, or other financial assets to seize the amount owed. As a final resort, they can also send the parent to jail if they believe no other type of enforcement would be effective.
Contact Us for More Information
If you have any questions regarding Child Support or Child Custody on Long Island, give us a call at 631-923-1910. The divorce law office of Robert E. Hornberger, P.C. will be pleased to offer you a free complimentary consultation to discuss your Child Support or any other divorce or family law issues.
At one of the hardest and most stressful times of my life, it was so comforting to have a team at Hornberger and Verbitsky who ALWAYS responded in record speed to my questions, phone calls, emails or texts and who I felt really cared about helping me through this difficult time. It was a long few years and I am grateful to all of you. Thank you so much Rob, AnneMarie, Christine, Patty, Joan and Lawrence. Your guidance, professionalism and expertise is appreciated beyond measure.
I would give 6 stars if I could. I can't say enough good things about Robert and his firm. We were in a situation for over 2 years and I could have never made it through without Robert's experience and knowledge. He guided me through tough times when needed and his expertise could "read" the situation and make the next best move for me. He was tough when he needed to be tough (thankfully) and at the same time guided me through the process to make me feel comfortable in an uncomfortable situation. I would not want to go through this process without Robert and his team having my back. he helped move the case along and not waste any time or money. One last time, I 100% endorse Robert and his expertise.
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As a divorce lawyer practicing in Nassau County and Suffolk County on Long Island, NY, I see first-hand how financial problems are frequently the source of marital discord between spouses. Very often, we find that divorce proceedings and bankruptcy filings are often intertwined. Due to the relationship between divorce and bankruptcy, it is important to understand the inner-workings of both areas of law and how filing for bankruptcy during divorce proceedings may affect all of the parties involved. In particular, it is essential for non-debtor spouses to understand what support they are entitled to when a debtor-spouse files for bankruptcy.
