Consequences of Bankruptcy in Family Law

Financial obligations in the context of a divorce can create a strain on the party ordered to pay. If a party is simply unable to keep up with all their obligations they may consider filing for bankruptcy. A bankruptcy filing generally results in an automatic stay meaning the party filing for bankruptcy is protected from creditors seeking payment from them until the bankruptcy is resolved however there are exceptions to this general rule. 11 U.S.C § 362 (b) provides that the filing of a bankruptcy petition does not operate as a stay for any proceeding regarding the establishment or modification of an order for domestic support obligations, concerning child custody or visitation, or for the dissolution of a marriage (including decree with court order or property settlement agreement except to the extent that such proceeding seeks to determine the division of property that is property of the estate). Accordingly, a party may not seek to dismiss all their obligations in a family law matter by filing for bankruptcy. Pennsylvania case law reiterates this point. In Schulze v. Schulze, 15 B.R. 106 (1981), the court held that “there can be no doubt that the state court action as it pertains to divorce and the custody of the minor children should not be stayed.”

Another component of filing for bankruptcy is the potential for certain debts to be discharged, meaning the obligation no longer needs to be fulfilled. 11 U.S.C. § 523(a)(15) provides that a debtor cannot discharge a debt to a spouse, former spouse, or child of the debtor that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree, or other order of a court of record. This statute is interpreted to mean that a party cannot discharge an obligation to provide support. A party used to be able to discharge an obligation to split assets and/or debts under a property settlement agreement or order on equitable distribution. In Deichert v. Deichert, 402 Pa. Super. 415 (1991), the court discusses which marital obligations are dischargeable or non-dischargeable in bankruptcy and concludes the court is to look at the intent of the parties and/or the effect/function of the obligation since debts under property settlement are dischargeable but support obligations are not. However, amendments to the bankruptcy law in 2005 provided that any order arising under any family law docket including equitable distribution is no longer dischargeable.

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Hurricane Sandy

Our area is still recovering from the aftermath of Hurricane Sandy. The storm’s strong winds and rain caused widespread damage over a large area of the nation. Specifically, southeastern Pennsylvania is still dealing with power outages due to downed trees and wires. Many government offices, schools and local courts were forced to close Monday and Tuesday of this week. At this point, all local courts in southeastern PA are open and may be contacted as far as any matters that need to be rescheduled. Our office hopes everyone has remained safe during the storm. We will continue to work hard to assist you in all your family law needs as our communities continue to recover from the aftermath.

 

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Emancipation

Emancipation terminates a parent’s obligation to support their child. Emancipation generally occurs when a minor reaches the age of 18 and has graduated high school. Whether a minor can be emancipated even before that time is a fact-intensive analysis. An emancipated minor must demonstrate they are able to assume all legal responsibility for themselves. Factors that are often considered include the child’s age, marital status, ability to support themself, and the desire to live independently of their parents. A decision on emancipation would be made based on the totality of the circumstances after examining all the facts in any given case.

Even if a minor is determined to be emancipated, it is not necessarily a permanent determination. If the circumstances supporting emancipation change, the child may no longer be considered emancipated. Based on PA case law, a minor’s marriage weighs heavily in favor of finding emancipation. Other key factors based on case law include the child moving out of the parent’s home and having a job to support themselves. Often times, emancipation may be raised if the child stops attending school prior to completion, particularly by parents who do not believe they should continue to be liable for support.

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Paternity in Family Law

When an unmarried woman has a child, paternity will need to be established before a father can be listed on the birth certificate, before the mother can seek support from the father and/or before standing for custody can be established. Establishing paternity can be as simple as the father executing an acknowledgment of paternity. The acknowledgment indicates the father is waiving his rights to any genetic testing or trial on the issue of paternity. If a father is unwilling to execute an acknowledgment or is simply unsure of the paternity of the child, genetic testing can be conducted so that the DNA results can be examined. Both parents will be ordered to participate in genetic testing. Failure to appear by the father can result in a court order declaring him as the father by default. Failure to appear by the mother can result in the court dismissing an action for support. Tests results alone are not sufficient to establish paternity. Instead, the parties must stipulate in writing that the test results prove paternity or the court must make an order on paternity after reviewing the test results.

Once an acknowledgment of paternity is signed, it is very difficult for a father to then try to allege the child is not his. An acknowledgment acts as conclusive evidence that the person who signed the acknowledgment is in fact the father of any subject child(ren). A court order on paternity will follow if the results indicate 99% probability of paternity. If paternity is established by court order, the decision is generally not immediately appealable. Instead, the appropriate time to appeal on the issue of paternity would be after a subsequent final child support or custody order. There is one exception to this rule based on paternity by estoppel. Paternity by estoppel recognizes a man as the father based on his role in the child’s life rather than the biological connection. The Pennsylvania Supreme Court has recognized that paternity by estoppel is immediately appealable so as to protect the established parent-child relationship. In the most recent case, genetic testing proved that a child born to a married woman was not her husband’s child but rather the product of an affair. The paramour tried to file for custody and genetic testing proved he was the father however the court would not allow the custody order to go into effect due to the fact the husband had raised the child all along.

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Contempt of Court

Be it divorce, custody or support, once a court order is put in place, any violation of that court order can be considered contempt. For example, if a custody order provides that the parents are to exchange custody every Wednesday and the exchange never occurs to the fault of one party, the faulting party is in contempt. The consequences of being held in contempt can vary. 23 Pa. C.S. 5323 (g) regarding contempt of custody provides for any one of the following as punishment: imprisonment for a period not to exceed six months, a fine not to exceed $500, probation for a period not to exceed six months; and/or counsel fees and costs. In practice, based on the severity of the case, the Judge may just give a verbal warning or may suspend custody until the court order is complied with.

Contempt of a support order occurs when a party fails to keep up with their support hearing. At a support contempt hearing, the non-compliant party will have an opportunity to explain why they are not current with their support. In the event they are unemployed, the court may inquire into why they are not working, their physical ability or inability to work, and what attempts to find employment have been made. There may be contempt of an order in a divorce matter both while the divorce is still pending and after the divorce. For example, if one party succeeds in getting exclusive possession of the home during the divorce and the other party attempts to re-enter the home, there is a basis for contempt. Post-divorce contempt usually involves one party failing to follow through with their obligations under a settlement agreement or divorce judgment.

 

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Easier Transitions for Military Families

First Lady Michelle Obama has been promoting a law that would make it easier for military spouses to maintain gainful employment in spite of their often transient lives. The law makes it easier for military servicemembers and their spouses to transfer out-of-state occupational licenses so they can continue working in their profession without significant delay after relocating. Just last week, Illinois became the 23rd state in the country to pass the legislation.

Without such legislation in place, many military spouses are forced to take odd jobs to pay the bills while they deal with the red tape of having an occupational license transferred. Often, it can take several months or more to have the licenses transferred based on the cumbersome paperwork still required in some states.

First Lady Obama took up this initiative to help support military families back in February of 2012. Prior to February, only 11 states had similar legislation on the books. Pennsylvania is one of the states that has yet to pass legislation favorable to military spouses looking to continue their careers despite relocation.

More on Military Divorce Law

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