Do I need to do anything in my separated spouse’s bankruptcy?
Although you may not be required to do anything in your estranged spouse’s bankruptcy, your best interests may be served by examining the information filed by your spouse and by participating in his or her bankruptcy.
A bankruptcy filing always contains treasure trove of useful financial information about the debtor. A person who files bankruptcy must sign the petition, schedules and statements under penalty of perjury. The debtor must reveal current or projected income and expenses, lists or schedules of current assets and liabilities, descriptions of current lawsuits, foreclosures, repossessions, and past information such as income received from employment or business, income from all other sources for the last three years, prior bankruptcies, and history of other names used and addresses for the past three years. The person filing bankruptcy must also disclose information about businesses owned, or in which the filer participated, during the last six years, and whether the debtor engaged in certain types of transactions such as estate planning or creating a trust during the last eight years. In addition, the person filing bankruptcy must submit documents supporting the disclosures, such as paystubs, bank statements, tax returns, deeds, investment and retirement account statements, and DMV records to the chapter 7 or chapter 13 trustee appointed in his or her case.
Similarly, during a Virginia separation and divorce, a spouse may be compelled to file a monthly income and expense statement or a list of property and liabilities for determining pendente lite relief, child support, spousal support, and equitable distribution. The husband or wife in a Virginia divorce, custody or support case may use discovery to obtain sworn answers from his or her spouse about assets, debts, income, expenses and property. By examining the bankruptcy filing, a husband or wife can compare the information submitted in each proceeding by his or her spouse, and discover additional matters to investigate.
You may receive a Proof of Claim form along with a Notice of the Meeting of Creditors in your husband or wife’s bankruptcy case. In a no-asset Chapter 7, you will probably be instructed not to file a proof of claim. In a Chapter 7 case where assets will be administered and in every Chapter 13 bankruptcy, you should file a proof of claim with supporting documents. In every Chapter 13 bankruptcy, you should also examine the proposed Chapter 13 plan to determine the accuracy and treatment of your claims.
You may want to attend the meeting of creditors where you will be given a brief opportunity to ask questions of your husband or wife after he or she has been sworn in to testify under oath. A more detailed examination of your spouse can be obtained through a Rule 2004 deposition. You can compel the production of documents at the Rule 2004 examination and you may ask about the acts, conduct, or property of the debtor, the liabilities and financial condition of the debtor, and any matter that affects the administration of the bankruptcy estate or the debtor’s right to a discharge.
You should discuss with your attorney the advisability of obtaining relief from the automatic stay in your husband or wife’s bankruptcy case in order to continue your Virginia divorce case. Actions taken in violation of the automatic stay or discharge order may be void or voidable, and may subject you to liability for damages, sanctions and attorney’s fees in the bankruptcy court.
You should consult with your Virginia bankruptcy or divorce lawyer to discuss whether you should participate in your spouse’s bankruptcy.