Bankruptcy and Divorce

Lets take the following hypothetical situation:

Ryan and Lauren are married but soon to be divorced.  Ryan is planning on moving from the marital residence in Miamisburg, Ohio, to Tennessee with his new girlfriend Jennifer.  Lauren has already moved to Kettering, Ohio.  Can they file a joint bankruptcy together in Dayton?  Would it be better to wait and file their bankruptcy after the divorce is final?

Divorces breed bankruptcies.  During the marriage there was one household with one set of expenses.  Once one spouse moves out, there become two households and two sets of expenses, and divorce litigation can be very costly.  Filing bankruptcy is often the only solution for people getting divorced.  But how does separation and divorce affect a Chapter 7 bankruptcy or a Chapter 13 bankruptcy?

Ryan and Lauren can file a joint petition at any time during their marriage, even if they are maintaining separate residences.  Filing joint bankruptcy is cheaper because saves the additional filing fee.  However, most bankruptcy attorneys will not advise filing a Chapter 13 bankruptcy in anticipation of a divorce.  Chapter 13 bankruptcies require that the debtors make monthly payments for 36 or 60 months.  This is impractical to do if the individuals involved will no longer be married.

The timing of the two separate cases in Ohio is also important.  Filing either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy will stall any existing divorce proceedings.  The bankruptcy court issues what is called an Automatic Stay at the beginning of the bankruptcy that prohibits anyone from taking action on any debts.  Therefore, the divorce court cannot divide the debts of the spouses until the divorce case is final or a Relief From Stay is obtained from the bankruptcy court.  It is often considered preferable to file the joint Chapter 7 bankruptcy a couple of weeks before filing the divorce case, as the Chapter 7 bankruptcy does not generally take as long as a contested divorce.

A skilled bankruptcy attorney will be able to answer all of your questions about filing bankruptcy in the context of a divorce or separation.  Many Dayton-Springfield area attorneys offer free bankruptcy consultation.

RESTRICTIONS ON THE PARTIES WHILE THE CASE IS PENDING:  By Ohio Revised Code, neither party is permitted to cancel or change beneficiaries of any life or health insurance policies while the case is pending.  Do not change or cancel insurance policies while the action is pending.  This is a matter of statutory law and applies to all parties to a divorce in Ohio.  In other words, this is not something that your attorney will seek to have the court order for your case – it is simply the law for every case.  In fact, the Court would not have the power to allow a party to change or alter the provisions of insurance policies that are in place at the time of the filing for divorce.

However, it is also quite common for both parties to file for Temporary Restraining Orders to restrain the opposing party from doing something while the case is pending.  These restraining orders are actual, binding court orders that restrict the parties from doing certain activities while the case is pending.  Some common temporary restraining orders that our firm might file include:

a.   Restrain the parties from incurring further debt in the other party’s name

b.   Restraining the parties from depreciating assets

c.    Restraining the parties from removing the children from the state of Ohio

d.    Restraining one of the parties from re-entering the marital home, if that party has been voluntarily absent from the home for more than 30 consecutive days.

e.     Restraining the parties from abusing, annoying or harassing the other party

This Ohio divorce fact was brought to you by the Miami-Valley law offices of Morrison & Nicholson.  Author: Charles W. Morrison, Partner at Morrison & Nicholson. Call today to schedule a free consultation with an attorney by calling (937) 432 – 9775.

THE TIMING OF THE CASE WLL VARY DEPENDING ON SERVICE OF PROCESS AND THE COURT’S DOCKET: If you are the Plaintiff (filing for divorce first), you must first “perfect service” of process and the court summons on the other party (Defendant) before the court (Greene, Butler, Montgomery, Clark, and Warren County Courts) will schedule a court date.  The Court does not have jurisdiction over the opposing party until he/she has been properly served with the appropriate paperwork.  Service is typically perfected via certified mail, issued by the Clerk of Courts shortly after the case is filed.  Essentially, the Clerk gathers all of the documents filed, creates its own summons, and requests that the postal service deliver the documents to the defendant via certified mail. The Court will not consider service perfected until the U.S.P.S. sends the return receipt to the Clerk of Court’s office.

If the defendant refuses to sign or otherwise claim the certified mail, the clerk of courts will then notify your attorney that service was not perfected.  The attorney will then ask the clerk to “re-issue” service via regular mail, as Ohio law allows service by regular mail if the certified mail was unclaimed or refused by the defendant.  Service can also be perfected via personal service by the county sheriff or a special process server (although these methods are more expensive than certified mail).  Regardless of how service is ultimately perfected, the court will not schedule the case for a hearing until service has been completed.   Further impacting the scheduling of the case is the court’s own docket.  Logically, if the court has a backed-up docket, your case will be scheduled out further than if the court’s docket is not as crowded.   How quickly you receive a court date cannot be controlled by the attorneys.

Brought to you by the Miami-Valley law offices of Morrison & Nicholson.  Author: Charles W. Morrison, Partner at Morrison & Nicholson. Call today to schedule a free consultation with an attorney by calling (937) 432 – 9775.

YOU WILL NEED TO PROVIDE CERTAIN PERSONAL INFORMATION: Some Courts have mandatory discovery procedures where each party must voluntarily turnover financial information to the other side (Montgomery County requires mandatory disclosure of financial information).  This helps both parties understand what marital and non-marital assets and liabilities are involved in the case and helps facilitate settlement.  Further, Ohio rules of civil procedure allow each party to demand certain information and answers under oath to certain questions from the other party.  Finally, certain courts, such as Greene County Domestic Relations Court and Montgomery County) require mandatory pre-trial statements be filed with the court (that contain an offer of settlement) that must be completed and exchanged between the parties before the pre-trial with the judge.

Brought to you by the Centerville, Ohio law offices of Morrison & Nicholson.  Call today to schedule a free consultation (937) 432 – 9775.

WHEN MINOR CHILDREN ARE INVOLVED YOU WILL NEED TO ATTEND A SEMINAR: If the case involves children, Ohio law mandates that both parties attend a parenting seminar prior to the final hearing.  The purpose of the seminar is to educate both parents as to how children are affected by a divorce and ways in which to manage the adjustment.  The class is usually two hours and is held in the evenings.  The location of the seminar varies by county, as each county has its own seminar provider.  For instance, in Montgomery County the seminar is held at Sinclair Community College in downtown Dayton, Ohio.

Brought to you by the Miami Valley Ohio law offices of Morrison & Nicholson.  Call today to schedule a free consultation (937) 432 – 9775.

YOU WILL NEED A WITNESS IF YOU ARE THE PLAINTIFF IN AN OHIO DIVORCE ACTION:  If you are the Plaintiff in Montgomery, Greene, Clark, or Warren County Ohio (filing for divorce first), you will need to have at least one Witness with you at the final divorce hearing that can corroborate your testimony, whether or not the case is contested or not.  Under Ohio law, the legislature has made a policy decision that all testimony related to the grounds for a divorce must be corroborated by another witness.

The can be anyone that knows you (friend, mother, brother, sister, etc).  You will need to provide the full name, address and relationship to you of the person that will be your witness.  The person may or may not have to testify about personal matters of your marriage, depending on whether the divorce is “contested” or “uncontested.”

If the case is uncontested and you are seeking a divorce based upon the ground(s) of incompatibility and/or living separate and apart for more than one year, the witness will simply have to testify that you and your spouse are incompatible and/or have been living separate and apart for more than one year.   If the ground(s) for divorce include adultery, extreme cruelty, gross neglect of duty, etc., then obviously the witness will have to testify to more personal marital matters of which they have personal knowledge.

DIFFERENCE BETWEEN A CONTESTED AND AN UNCONTESTED DIVORCE IN OHIO: INCLUDING MONTGOMERY, WARREN, AND GREENE COUNTY:

A contested Divorce is one where the Defendant files an Answer to the complaint for divorce.  The Defendant could also file a counterclaim for divorce along with the Answer.   An uncontested divorce is one where the Defendant does not file an Answer to the Complaint or enter an appearance in the case at all.  If the case is uncontested, you will only need to appear in court one time for the final “merits” hearing or “final trial.” 

If the Defendant files an Answer to the Complaint (or Answer and Counterclaim) and the matter becomes contested, the case will be moved to the “contested docket” and there will now be multiple court appearances.  The court will schedule (1) a pre-trial at the court and (2) the final trial.

The pre-trial is where both parties and their respective counsel meet with the judge in his or her chambers in order to discuss the particulars of the case (what is being disputed, what the parties are in agreement as to, whether the case is likely to settle, what issues will be litigated, etc.).   The pre-trial is not conducted in the courtroom or on the record, but is more of an informal meeting.

After the pre-trial is concluded, the parties will usually continue to negotiate a settlement of the case, often based upon feedback from the judge as to how to resolve the remaining disputed matters.  If the parties do come to an agreement as to all issues, the final trial will consist simply of the parties agreeing on the record that the court has jurisdiction and that each voluntarily entered into the proposed agreement, that each find it fair and equitable, and that each is requesting the court adopt the agreement as part of the final decree of divorce.

If the parties are unable to reach an agreement as to all issues (say, for instance, the parties cannot agree on child custody or the amount and duration of spousal support) then all remaining disputed issues will have to be litigated at the final trial.  Both parties will be able to call witnesses and introduce other forms of evidence, such as school records, medical records, etc. in an effort to prove he or she should prevail on the disputed issue(s).  Divorce trials are normally scheduled for an entire day, but depending on how much testimony will be taken on the record, the case could last for several days.

Brought to you by the Miami Valley Ohio law offices of Morrison & Nicholson.  Call today to schedule a free consultation (937) 432 – 9775.

Often, people want to know whether they can leave the state with their child during or after a divorce.  Like many answers to legal questions, a good attorney will tell the client, “it depends.”  Here is a very brief overview of the law and considerations.

Prior to the Divorce Process

If the two parents are still married and there has not been a complaint for divorce filed in any court of this state, Ohio law states that parents stand on equal footing as to custody of the children, and that both parents are considered the residential and legal custodian of the children.  This means that yes, technically, there is no crime involved for taking the children and moving to another state.  As a legal custodian, the parent that wants to move certainly can determine where and with whom the child shall reside.

However, it should be noted that while a parent that is the legal custodian of the children can move and relocate with his or her children, this fact may in fact impact a court’s later determination on how to allocate parental rights and responsibilities (custody and parenting time/visitation).  Some of the factors that a court is to consider is whether a parent is or is planning to establish a residence outside of Ohio, whether a parent is more likely than the other to facilitate and promote visitation, and finally, whether the other parent has been guilty of parental kidnapping.  Please note that although no criminal charges will follow, taking the children out of state may be considered “parental kidnapping.”

During the Divorce Process

When the parents are not yet divorced, but a complaint for divorce has actually been filed in an Ohio court, there still has not been a FINAL allocation of parental rights and responsibilities.   However, unless the parents are still residing in the same household, the Court will issue temporary orders as to custody and visitation.  The Court will normally award one parent the interim temporary custody of the children during the pendency of the case.  If the parent that was not designated as the temporary custodian takes the children, then that parent will be guilty of contempt of court for violating a valid court order.

Furthermore, it is very common and routine for both parents to seek and obtain temporary restraining orders during the pendency of the case.  Normally these restraining orders prohibit a parent from removing the children from the state of Ohio, except for vacations of 14 days or less.  Again, if the non-residential (temporary) custodian removes the children to another state, that parent will be in violation of a valid court order.

If a parent believes it is necessary to move to another state, that parent will have to file a motion requesting the court allow that parent to do so.

Again, this is a very brief sketch as to this subject and it cannot be urged strongly enough that any parent that wants to move out of Ohio consult an attorney to ensure that it will not negatively impact that parent’s case for custody or subject him or her to civil or criminal penalties.