Matthew A. Dunaway - Attorney At Law

Birmingham Bankruptcy Lawyer & Alabama Debt Collection Defense Attorney

Birmingham, Alabama
205.705.3590

Bankruptcy and Divorce

Divorce can often lead to additional financial struggles and eventually end in filing for Chapter 7 Bankruptcy or Chapter 13 – Debtor’s Court. Both the loss of income and the added expense of the divorce lead many people to file Chapter 7 Bankruptcy or Chapter 13 Debtor’s Court after filing for divorce.

There are two main financial issues that arise due to divorce:

1. Child Support

2. Which spouse pays which debts (marital debts)

Child Support

Many parents fall behind on child support payments. This can lead to additional fees, interest and in extreme examples, jail. One solution available for anyone liable to pay child support, but who has fallen behind, is Chapter 13 Debtor’s Court.

By filing Chapter 13 Debtor’s Court, the spouse responsible to pay the child support is able to put the arrearage (back child support) into a Chapter 13 plan and pay it off over a five year period. Current child support payments must also be made. Thus, the spouse responsible to pay the child support will have two payments: 1. the current (normal) child support and 2. the payment to the chapter 13 trustee for the back child support.

Marital Debts

This is one of the most misunderstood aspects of divorce. Many people believe that just because the divorce decree states that their ex-spouse must pay for the debt (whether it is a credit card, car, or home) that they are no longer responsible to the creditor for this debt; this is absolutely false.

If both parties (husband and wife) are responsible for the debt before the divorce, in the eyes of the creditor, they are still liable for the debt after the divorce. Even if the divorce decree states that one party is “responsible” for the debt, this does NOT mean the creditor cannot collect the debt from the spouse deemed no longer responsible by the divorce decree. Thus, it is imperative for ex-spouses to make sure that each party is paying the debts they are responsible for.

It is quite common for one ex-spouse to default on the debt, then the creditor begins to collect from the other ex-spouse. Not only can this added extra stress and financial burden to the “innocent spouse” but it can also effect the consumer’s credit report. Many debtors ruin not only their own credit reports, but also the credit reports and credit scores of their ex-spouses when they default on marital debts. Eventually debt collectors and debt buyers can become involved leading to creditor harassment, debt collection lawsuit, repossession or foreclosure.

If you have questions about bankruptcy, debtor’s court, child support, marital debts or how divorce and bankruptcy relate, please feel free to contact us for a free consultation.

Birmingham, Alabama Chapter 7 Bankruptcy and Chapter 13 Debtor’s Court Lawyers

Alabama Consumer Protection Attorneys representing clients throughout Alabama in Birmingham, Mobile, Dothan, Enterprise, Eufala, Auburn, Montgomery, Tuscaloosa, Anniston, Gadsden, Hoover, Cullman, Huntsville, Florence, Tuscumbia, Decatur, Leeds, Moody, Sprigville, Alabaster and Pelham.

Schedule your FREE phone consultation today. Call 205.705.3590 or fill out the form below:

  • This field is for validation purposes and should be left unchanged.

Client Testimonials

Read more

Ron M.

I felt you were very knowledgeable about what you are doing and you actually care about your clients. I’m glad I drove the hour to your office instead of choosing a lawyer that was just 5 minutes from my house. We want to Thank you for All your help. Thank You very much for taking time to here our situation and helping us through that difficult time.

Ron M.

Iris H.

Matt, You made my bankruptcy experience so easy and smooth. How can I ever thank you? I came to you, afraid but hopeful. I became confident that everything would work out in my favor after talking with you several times, and I thank you so much for those assurances. I was drowning in debt which was affecting my health, both mentally and physically, due to all the stress from having to deal with financial problems most of the time. I had the best family Thanksgiving this year, since I was free of that burden. I am happier and healthier now,… Read more “Iris H.”

Iris H.

Mel H.

With all the anxiety I had going into this process. You made it as easy as possible. From always being available to answer all the questions to never making me feel ashamed of my current financial position. You gave me hope and helped me to feel that this was not the end but rather the beginning. Thank you again for all your help!

Mel H.

Lotnina E

He was so helpful and made me feel at ease every step of the way!

Lotnina E.

Latest Articles From The Blog

Birmingham Bankruptcy Courthouse Reopened

The Birmingham Bankruptcy Courthouse, officially known as the Northern District of Alabama-Southern Division, recently reopened after several years of renovations.  Although the outside has kept its classic look, except for some minor landscaping changes, the inside is vastly different.  All three courtrooms are now located on the first floor, right off the main lobby area, making it much easier for debtors, creditors and attorneys to find their way to the correct courtroom.  Meeting of Creditors hearing are now held on the basement level in a room much more conducive to its purpose.  Although I cringe at the estimated cost ofRead more “Birmingham Bankruptcy Courthouse Reopened”

Your Bankruptcy Hearing: What to Expect

For many people, one of the most frightening aspects of bankruptcy is going to court. What’s going to happen?  Who will be there?  Will I be asked embarrassing questions? Here are 10 things you need to know about your bankruptcy court date: 1.  Don’t expect to see the Judge.  If you file Chapter 7 Bankruptcy, you will probably never see the Judge.  A “Bankruptcy Trustee” (he’s just a lawyer appointed by the court to administer your case) will ask you four or five simple questions at your hearing. 2.  Your bankruptcy lawyer will be at the hearing with you.  He’s there toRead more “Your Bankruptcy Hearing: What to Expect”

To Deduct or not to Deduct: The Means Test, the Supreme Court and your car.

May a debtor claim an ownership expense deduction under the means test if the vehicle is unencumbered? The Supreme Court will hear a case on this issue to resolve a split in the circuits; well, not a 50/50 split, but the usual split…the 9th Circuit versus everyone else. Pre-BAPCPA, this would be a simple issue…if the debtor has an expense, then the debtor is allowed the deduction, as long as it does not breach the subjective test of “substantial abuse”; a subjective test based on “real” objective figures. In 2005, BAPCPA introduced the “means test”, an objective test based onRead more “To Deduct or not to Deduct: The Means Test, the Supreme Court and your car.”

Hello, I am Matt Dunaway

I like helping people. That’s why I practice law and focus in the areas I do. Sometimes, things don’t go like we expected them to go. I can vouch for this from personal experience. And sometimes, we need help getting back on track.

That’s what I do. I help people get back on track, financially.

Read Matt's Bio

Location

One Perimeter Park South
Suite 100 North
Birmingham, AL 35243
 

MENU