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Filing for Bankruptcy May Effect your Divorce Appeal

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On occasion, a divorce judgment may cause an individual to consider bankruptcy. For instance, an individual may be financially overwhelmed by a divorce judgment that favors their spouse. He or she may lose assets and be forced to make monthly payments, on top of covering attorney fees. As a result, they may become unable to continue making timely payments on their car. That person may consider filing for bankruptcy to stop their car from being repossessed. However, it’s critical to note that filing for bankruptcy may remove your ability to appeal a divorce judgment.

This is because bankruptcy proceedings stop the continuation of other judicial actions against the debtor until the bankruptcy protection is lifted. This protection is referred to as a “stay” against creditors and other collection officials. If you wanted to appeal your divorce judgment, you should hold off on filing for bankruptcy until the divorce judgment is finalized. If you were to file for bankruptcy before the appeal of your divorce judgment, you risk denying the divorce court the opportunity to listen to the appeal because of the bankruptcy stay.

In the case of Alt v. Alt, the husband learned this lesson the hard way that filing for bankruptcy removed his ability to appeal his divorce judgment. The divorce court entered a judgment on January 23rd, 2017. The husband filed for bankruptcy on February 2nd, and then appealed the divorce court’s judgment on February 24th.

In response, the wife argued that her ex-husband’s filing for bankruptcy stayed the divorce appeal. The Appeals Court held that the wife was correct. The filing for bankruptcy stayed the continuation of any judicial proceedings against the debtor. Here, the filing of appeal in divorce court was a request to continue a judicial proceeding. Therefore, the appeal was void due to the bankruptcy stay. The appellate court was without authority to hear the appeal.

The appellate court explained that the ex-husband may have properly appealed the divorce judgment after his bankruptcy hearing had concluded and the stay was lifted. However, his eagerness to file ultimately denied him his ability to appeal.

The result from this case is that it’s critical to understand the proper filing dates of court procedures. Failure to understand these dates may result in a similar situation where you are denied the opportunity to appeal an adverse judgment.

This situation would be especially damaging if the original divorce judgment did contain serious errors or inaccuracies.

If you find yourself or a loved one in such a situation, you should have an experienced, knowledgeable attorney on your side to ensure that you make the best arguments. Contact INGRAM LAW LLC at (205) 335-2640 for an attorney with the experience and knowledge that can make all the difference.

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