Tag Archives: divorce proceedings

Bankruptcy Could Affect Divorce Proceedings

bankruptcy, Wheaton divorce attorneysMany marriages fail due to financial stress. Even if there are other factors involved, if one or both spouses file for bankruptcy, that may complicate any pending divorce proceedings. The biggest impact, in many cases, stems from the fact that filing for bankruptcy in federal court automatically stays or suspends any pending judicial proceedings involving the debtor. This includes a divorce lawsuit that has already been filed in the Illinois courts.

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, a debtor must turn all of his or her assets over to a court-appointed trustee. The trustee then liquidates the assets, subject to certain exemptions, and uses the proceeds to pay back the creditors as much as possible. Any exempt or remaining assets are then returned to the debtor, who receives a discharge from the bankruptcy court.

But what happens to marital assets that are divided during a divorce? For example, in a recent Illinois bankruptcy case, a Chapter 7 trustee sought to “avoid” or undo a transfer of a husband’s share of his formal marital residence to his wife. The couple owned the house as “marital property,” which under Illinois law meant each spouse “has a species of common ownership” that “vests” once one spouse filed for divorce. Once the court divides the property and distributes it to one spouse, the other spouse’s legal interest is “extinguished.”

Judge Rejects Bankruptcy Trustee’s Efforts to Undo Divorce Settlement

In this case, the wife filed for divorce in October 2012. A few months later, the husband filed for Chapter 7 bankruptcy protection. This automatically stayed the divorce case for about two years. Once the bankruptcy court lifted its stay, the divorce court in Illinois proceeded to award sole ownership of the residence to the wife.

The Chapter 7 trustee challenged this order in bankruptcy court. The trustee argued the wife was required to file a formal lien on the property in order to enforce the divorce court’s judgment. The bankruptcy judge–and later a U.S. district court judge–rejected this argument.

As the district judge explained, federal law treats the bankruptcy trustee as the equivalent of a “bona fide purchaser” of real property. This is a formal way of saying that a hypothetical person who wanted to buy the husband’s 50 percent interest in the house has a legal right to notice of the wife’s contingent claim on that interest. The trustee argued the wife never provided that notice by filing a formal lien.

The judge, however, said that was unnecessary. The trustee already had “constructive” notice of the wife’s interest based on the fact the property was previously held as joint tenancy—which is a matter of public record—and the husband and wife had lived there together for many years. A “prudent buyer” would have inquired as to the wife’s ownership interest in the property, regardless of whether she filed a lien.

Are You Facing Bankruptcy and Divorce?

This is the sort of highly technical legal issue that may arise when bankruptcy mixes with divorce. Even under the best of financial circumstances, divorce is usually a messy operation. That is why you need an experienced DuPage County family law attorney at your side. Contact one our three convenient locations to speak with a lawyer today.

 

Source:

https://scholar.google.com/scholar_case?case=14536825870183332974&hl=en&as_sdt=6,31

Bifurcated Divorce: Can I Get Divorced Right Away in Illinois?

bifurcated, Wheaton divorce attorneyNormally, a divorce is a single judgment that not only dissolves the parties’ marriage but also resolves all outstanding issues, such as division of property and establishing child support. A contested divorce can take several months or years to resolve, but there are some situations where one party may need to expedite the process. Illinois courts, therefore, have the discretion to split–or bifurcate–a divorce into separate proceedings if the judge finds there are “appropriate circumstances.” With bifurcation, a court can immediately divorce the parties while reserving other issues until a later date.

Court Permits Bifurcated Divorce to Terminally Ill Man

A recent Illinois case illustrates how bifurcation works in practice. In this case, a couple married for over 20 years “stopped acting as husband and wife,” according to court records, although they continued to reside in the same house. For approximately seven years afterward, the husband was in a romantic relationship with another woman. Eventually, the husband started living with his girlfriend.

Shortly thereafter, the husband learned he had skin cancer. Treatment proved unsuccessful and by March 2015, doctors determined the husband had less than a year to live. The husband, wanting to immediately marry his longtime girlfriend and “create an estate plan free of [his wife's] influence,” filed a petition in Cook County Circuit Court seeking a bifurcated divorce. A month later, he filed a second “emergency” petition claiming “he had substantially less time to live” than previously thought.

The wife opposed the petition, but the court ultimately granted the bifurcated divorce. The parties’ marriage was legally dissolved on July 27, 2015. The husband and his girlfriend married four days later. The husband died less than a month later, on August 21.

His death did not end the legal proceedings, however. The wife appealed the Circuit Court’s decision to grant the bifurcated divorce. This past October, the Illinois First District Appellate Court determined the trial court acted correctly, as there were “appropriate circumstances” justifying the immediate grant of divorce.

The First District noted there were several prior cases in Illinois (and other states) where courts allowed “terminally ill petitioners” to receive divorces before they died. In a 2002 decision, the Fourth District Appellate Court said allowing bifurcated divorces in these situations may encourage a dying spouse to “seek a dissolution of marriage in the hopes of increasing the amount of their estate for their heirs,” but conversely, “to hold otherwise encourages the surviving spouse to delay the divorce proceedings as long as possible to avoid the termination of their rights as surviving spouse.”

Need Help With the Divorce Process?

Bifurcation is not a normal process, and the majority of divorces take a significant amount of time and energy. Ideally, the parties can resolve their issues without the need for litigation, but, sometimes, a full trial is necessary. Whatever your situation, if you are contemplating divorce and need to consult with an experienced DuPage County family law attorney, please contact our offices right away.

 

Sources:

http://www.illinoiscourts.gov/Opinions/AppellateCourt/2016/1stDistrict/1152404.pdf

http://www.illinoiscourts.gov/opinions/appellatecourt/2002/4thdistrict/February/Html/4010567.htm

Bifurcated Judgments and Divorce

marital negotiations, Illinois divorce attorney, divorce trial, Ordinarily, divorce proceedings are handled in a single hearing. This means that there is a single proceeding in which the court both enters an official judgment dissolving the marriage and settles issues like property division and child custody. However, there are certain circumstances under which the court can hold two separate hearings, one to dissolve the marriage officially and another to settle the practical issues like property division. These sorts of proceedings, known officially as bifurcated judgments, are allowed under Illinois family law 750 ILCS 5/401(b). Yet, the law only allows for these sorts of split judgments under a limited set of circumstances, and even when they are allowed, they come with a set of pros and cons that need to be weighed.

When Bifurcated Judgments Are Available

Illinois statutory law allows for bifurcated judgments under “appropriate circumstances.” This vague standard has left it largely to the courts to determine when such circumstances exist. Courts have been creating non-exhaustive lists ever since. Generally speaking, the circumstances are appropriate whenever one of the parties has an interest in terminating the marriage in a timely manner and it does not unduly prejudice the other spouse. For instance, there was a divorce case in which a woman was dying of disease, and was not expected to live long enough to make it through a conventional divorce. She was allowed a bifurcated judgment for estate planning purposes. In another case, a married woman was seeking a divorce so that she could marry another man. She was already pregnant with the other man’s child, and sought the bifurcated divorce so that she could marry him quickly. The court allowed this because the other man was better able to provide for her and the child’s medical care. These are just some of the many examples of circumstances where courts may consider using a bifurcated judgment.

The Pros and Cons of Bifurcated Judgments

As previously mentioned, bifurcated judgments often come with a variety of pros and cons. Usually, many of the benefits are specific to the individual cases, like the ones above. It may be an issue of estate planning, insurance, or some other legal formality, but generally speaking it is a situation in which formally ending the marital rights as quickly as possible is beneficial in its own right. Beyond that, there is also an emotional benefit to making a quick end of the marriage. The difficulties of these sorts of judgments are twofold. First, there is the practical issue that it will require two separate legal hearings, which means more time in court. Second, the end of the marriage is often a powerful factor in making spouses settle contentious issues. With that already taken care of, many parties become more stubborn, which can lead to a judge making more of the decisions.

If you believe you could benefit from a bifurcated divorce or you simply have more questions about the practicalities of the divorce process, contact an experienced DuPage County divorce lawyer today. Our professionals are standing by to answer any questions you may have.