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Orders in divorce cases can't supersede bankruptcy orders

Florida residents who are divorcing should be careful with how they handle the property division portions of their divorce cases. A recent case that was decided in the U.S. Bankruptcy Court in Georgia demonstrates the limits of the reach of family court decisions in some property division matters.

In the case, a family court ordered a man to pay his ex-wife $53,000 in the couple's property division portion of the divorce case. The judge termed the money as a property division payment and ruled that the man would not be allowed to discharge it in bankruptcy. Two weeks later, the man filed for bankruptcy, and the ex-wife challenged his ability to seek a discharge of the $53,000 based on the family court's order.

The bankruptcy court ruled that family courts do not have jurisdiction over bankruptcy court matters and that the earlier ruling was invalid. The man would be allowed to have the balance of the $53,000 discharged if he successfully completed his bankruptcy case. The man was also ordered to pay $1,300 per month in child support but that would not be dischargeable in bankruptcy as a matter of public policy.

People who are preparing to divorce may want to get advice from property division attorneys about how to handle the division of their assets and debts. Experienced lawyers may be knowledgeable about jurisdictional issues and potential tax implications of different types of property division scenarios. They may help by drafting proposed settlements in ways that avoid some potential legal problems. Attorneys may also be able to negotiate full agreements that protect their clients' interests while avoiding negative tax consequences. By applying their knowledge of the law, attorneys may help their clients emerge relatively unscathed from their divorces so that they can move forward with their lives.

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