Divorce and Bankruptcy

divorce and bankruptcy

Show Topic: Divorce and Bankruptcy

This show aired on April 16, 2017. Attorney David Enevoldsen hosted guest Aaron Berkley, a bankruptcy attorney. The show discussed various issues related to the intersection of bankruptcy and family law, including such things as what the different options for consumer bankruptcy are, how the filing of a bankruptcy case impacts a family court case, what kinds of family court obligations can or cannot be discharged in bankruptcy, and whether it makes sense to file a bankruptcy action before or after a divorce.

Guest Information

Aaron works for the Berkley Law Office, and can be reached at 480-921-2993 or through www.mjberkley.com.

Headlines

Headlines on this show looked at a lawsuit in Australia over a child recovery expert and the claim of false imprisonment by Mazen Hassan Baioumy and the Arizona District Court’s ruling that Arizona’s way of criminalizing sexual molestation of a child is a violation of the U.S. Constitution.

Did You Know

Did You Know on this show was a quiz about family law trivia.

Transcript

Announcer:                            The discussions and information provided in Family Law Report are intended to be general in nature and are not directed for any individual circumstances. No attorney client relationship is being formed through this program. If you need legal advice, your particular circumstances can vary from what is presented here, and you should seek the advice of an attorney licensed to practice in your state.

                                                      Welcome to the Family Law Report, the show that explores issues related to marriage, divorce, and children. Hosted by David Enevoldsen, a practicing family law attorney in Arizona. Now here’s your host.

David Enevoldsen:             Hello everybody, welcome to Family Law Report. I’m your host, David Enevoldsen here with you every sun at noon on Independent Talk 1100 KFNX. Here on Family Law Report we talk about all the current topics of family law, and that can range from stuff that’s going on in the political arena to just stuff as basic as how to work through nuts and bolts of a divorce. I am a practicing family law attorney, and when I say family law I mean specifically anything related to marriage, or divorce, or fights over custody of children, child support, that sort of thing.

                                                      I’m a partner at a law firm here in Arizona called Family Law Guys, it’s a firm that focuses primarily on helping divorcing parents avoid getting screwed out of time with their kids. We have offices in the Phoenix area, we have also a Prescott office, and while we don’t practice outside of Arizona if you want to reach out to us and schedule an appointment, you can do so by calling us at 480-565-8680, or you can check us out on our website at www.FamilyLawGuys.com.

                                                      On today’s show we’re gonna be talking about divorce and bankruptcy, and how those two intertwine, what strategies you can use and what legal obligations or rights are involved in all of that. I’m joined by my cohost today, Shelley Rosas. Shelley, thanks for being with us.

Shelley Rosas:                       Good morning.

David Enevoldsen:             Good morning. It’s actually noon now, so it’s not morning anymore. Shelley works for the same firm as myself. She works with us as an associate at Family Law Guys, and we also have a special guest, Aaron Berkley. Aaron, thanks for being with us.

Aaron Berkley:                      Thank you.

David Enevoldsen:             Aaron is a bankruptcy attorney, so he’s gonna be able to speak to us a lot about what we were talking about before, how bankruptcy interfaces with divorce. Before we get into all that, we’re gonna hit our headlines for this week. First up there was some press about a child recovery expert lawsuit. Now if you’ve been listening to the show for a bit, we’d previously had an episode in which we talked about international parental child abduction. Now, if you missed that show or you don’t know what that is, basically international parental child abduction is where a parent who may or may not have legal custody runs to another country with a child, and then basically camps out there so that the other parent can’t recover the child or has some sort of difficulty recovering the kid.

                                                      A lot of times what people will do is they will go to people called child recovery experts, where if the legal system is completely failing them, or they just wanna hurry it up, they’ll recruit these people that are called child recovery experts to run off to this other country and basically try to nab the kid and bring them back to whatever country they’re in. Part of this is problematic because there are a number of countries that haven’t signed the Hague convention, which has mechanisms that would bring back a child at least legally. One of the concerns that pops up in this is that if you’re trying to do this in what I characterize as sort of an Indiana Jones or James Bond-ish way, where you’re just trying to grab this child recovery expert to go out to this other country and grab the kid back, all sorts of problems can pop up.

                                                      Well, one was in the press recently where there was an Egyptian fellow who initiated a lawsuit against a child recovery expert under his claim for false imprisonment. Basically what happened was there was a fellow named Mazin, and I may be mispronouncing this, so if I do I apologize to anyone that knows how to pronounce it correctly. Mazin Hassan Bayumi. He had a daughter with his wife, Amal Finn, and Finn lived in Australia, Bayumi lived in Egypt. Finn, not being able to get her daughter back ends up recruiting a child recovery expert. They concoct this whole theme where the child recovery expert goes out and pretends to give dad, Bayumi, a job on a ship. Dad thinks he’s gonna be able to go out and do this 11 day cruise where he’s gonna be working, and so they trick him onto going onto this boat. That way they can distract him while mom and some other people go and grab the kid, and try to get of the country.

                                                      Well, while he’s there mom runs in, grabs the kid, Bayumi goes off on this ship, and then as mom tries to get out of the country she finds out that dad had put a travel restriction in place, so she wasn’t able to get the kid out of the country. Dad’s on this 11 day voyage, and then he gets back and then finds out everything that happened, the whole thing was this whole scheme to get him distracted. Then it turns into a big legal battle. Well, in this particular case mom actually was able to get her kid back, but as I guess retaliation or kind of as a second prong for that, dad ends up suing the child recovery expert on his claim for false imprisonment.

                                                      Now the child recovery expert is facing this whole civil lawsuit that they have to deal with. There was sort of a happy ending here, but at the same time, there’s this whole byproduct of the lawsuit. Another one of these potential dangers of dealing with a child recovery expert. The child recovery expert has had a response within the lawsuit by saying that, “Well look, here’s a bunch of pictures where dad was having all sorts of fun. He wasn’t there against his will. Here’s pictures of him snorkeling and holding fish that he was working on.” Always dangerous to go down that road, but I know sometimes people get very desperate, and they have nothing else to do in their minds, and so that’s what they try.

                                                      In other news we have, there was a recent ruling back in September of 2016 from the Arizona Supreme Court related to the criminal statue that addresses sexual molestation of a child. I know several criminal attorneys, particularly defense attorneys that are friends of mine that were kind of up in arms about this ruling. Basically what the ruling said was that the state, when it’s coming in and proving its case that somebody had indeed sexually molested a child, under Arizona statue the way that it’s written doesn’t have to prove that the conduct was motivated by sexual interest.

                                                      That is to say that a parent could basically just have contact with a child in their genitalia basically, and not have any sexual motivation, but that would be sufficient to uphold in a vacuum at least a charge of sexual molestation. Specifically the statute we’re talking about is ARS13 1401 E3, if you care about the subsections. It defines sexual contact as any direct or indirect touching, which is the key part of this, fondling or manipulating of any part of the genitals, anus, or female breasts by any part of the body or by any object or causing a person to engage in such contact.

                                                      The concern here is that if you were basically changing your child’s diaper without any sexual motivation whatsoever, but you’re just doing something you would otherwise have to do, all of a sudden in a vacuum you have engaged in sexual molestation as far as the state’s obligation is concerned. Now, that said, I think it’s important to note that you can raise in an action against you as an affirmative defense, and this is what the case law said, that you didn’t have a sexual motivation, but that shifts the obligation away from the state. Again, the state isn’t required to prove that.

                                                      Well, this was all back in September of 2016, and recently there was a US District Court case with Judge Neil Wake, who issued a ruling related to all this. He found that it was unconstitutional on its face, because his essential argument was this was a violation of due process to basically just take away the obligation of the state to have to prove that essential element. In that particular case, the defendant was dismissed. Now the Maricopa County Attorney’s Office has come back and said in a public statement that the ruling from the district court isn’t binding on the state, so they’re essentially not recognizing it. Now I know there’s a couple of attorneys sitting in front of me.

                                                      That kind of is my gut reaction as well, because the district court doesn’t have binding authority on anyone, so that’s essentially a trial court, federal level court. Them saying something doesn’t in a vacuum make the state have to comply with it. Do you guys have any thoughts on that?

Shelley Rosas:                       I do actually.

David Enevoldsen:             This is my gut reaction.

Shelley Rosas:                       During law school I worked in felony criminal prosecution for the state, and I also worked as a misdemeanor criminal prosecution. I guess my concern lies with the shifting of the burden to the parent, who may otherwise- The burden’s basically shifted from the state to the parent to show that there was no motivation, and that’s the part that concerns me a lot. I think that we’re gonna see future litigation on that, absolutely.

                                                      I think that that new, the federal court system decision will influence any state decision that gets made.

David Enevoldsen:             What we’re traditionally taught is that the district court level decisions are persuasive but not binding, so I don’t know where this goes from there. I don’t know if it gets appealed up and then there’s some federal propellant-

Shelley Rosas:                       Something’s gonna have to happen.

David Enevoldsen:             … who impacts it.

Shelley Rosas:                       Something will happen, yeah.

David Enevoldsen:             Yeah.

Shelley Rosas:                       It absolutely is-

David Enevoldsen:             Pretty sure I read something about-

Shelley Rosas:                       It’s left too wide open.

David Enevoldsen:             Right, right. We’ll see where that goes, but it is very concerning in the family universe, because again-

Shelley Rosas:                       Very concerning.

David Enevoldsen:             … you’re essentially caught in this space where you can be held criminally liable for doing just basic caretaking functions of your child, like changing a diaper or something, or putting your kid in the shower, or anything like that. At the same time, if you don’t do those things, now all of a sudden you’re negligent, and you’re gonna be criminally liable for not caring for your child.

Shelley Rosas:                       You’re in a lose-lose bind.

David Enevoldsen:             Yeah.

Shelley Rosas:                       It’s a lose-lose bind for parents. It’s a lose-lose bind for anybody that cares for children, and so in the family law universe it’s an impossibility.

David Enevoldsen:             Right.

Shelley Rosas:                       Someone’s gonna have to come in and solve that problem.

David Enevoldsen:             Absolutely.

Shelley Rosas:                       The burden cannot shift from the state to the parents.

David Enevoldsen:             Right, yeah.

Shelley Rosas:                       When they haven’t done anything wrong. The burden is always on the state to make their case.

David Enevoldsen:             I think I read somewhere that the state was taking a position that they didn’t necessarily have to prosecute things where they didn’t think there was motivation, but I don’t think that legally worked.

                                                      At any rate, we’re gonna take a quick break. I’m attorney David Enevoldsen joined by cohost Shelley Rosas and guest Aaron Berkley, a bankruptcy attorney. When we come back we’re gonna be talking about divorce and bankruptcy. If you wanna call in and ask any questions, you can do so at 602-277-KFNX. You’re listening to Family Law Report on Independent Talk 1100 KFNX.

Announcer:                            Family Law Report is hosted by Family Law Guys, an Arizona family law firm. Family Law Report is dedicated to confronting difficult issues related to marriage, divorce, and children. This can range everywhere from addressing the legalities and controversies of topics like gay marriage to current problems with the divorce system to simply providing tips to those getting married or going through a divorce or custody fight. Tune in every Sunday to Family Law Report at noon here on KFNX. If you wanna know more or to schedule an appointment with David or another one of the Family Law Guys attorneys, call 480-565-8680. That’s 480-565-8680.

David Enevoldsen:             Welcome back to Family Law Report. I’m David Enevoldsen, attorney with Family Law Guys, an Arizona law firm, here with you every Sunday at noon on Independent Talk 1100 KFNX. Joined today by my cohost Shelley Rosas who works for the same firm as myself, and guest Aaron Berkley of the Berkley Law Office. If you’d like to reach out, schedule an appointment with my firm, Family Law Guys, you can do so at 480-565-8680, or you can check us out on our website at www.FamilyLawGuys.com. If you’re listening and you wanna call in and ask any questions or share thoughts or just tell me that you really think I’m an awesome person, you can do so at 602-277-KFNX. Aaron, if somebody wants to reach out and talk to you about bankruptcy questions or find out more, how can people contact you?

Aaron Berkley:                      You can check my website out, MJBerkleyLaw.com. You can also reach me by phone, 480-921-2993.

David Enevoldsen:             Just can you spell out your website name?

Aaron Berkley:                      It is M-J-B-E-R-K-L-E-Y Law.com.

David Enevoldsen:             Cool, thank you. Today we’re talking about divorce and bankruptcy, and we’re gonna get into that right after we do our did you know? Did you know we do this every week now where we have just a little piece of family law trivia, and since we’ve got several people here I was thinking we could turn this into a quiz, an Easter quiz. I’m gonna ask a couple of questions.

Shelley Rosas:                       Actually before we do the quiz I’m gonna interrupt.

David Enevoldsen:             Okay, go ahead.

Shelley Rosas:                       Okay. I have my own did you know this week. I learned something about David this week. Apparently, and since it’s Sunday and for some people it’s Easter, he has a collection of Peeps. I went to the store and brought him a present today, so I have here for you David, sour watermelon Peeps, mystery flavor number one, two, and three. You have this year’s three mystery flavor collection.

David Enevoldsen:             Awesome.

Shelley Rosas:                       To add to your drawer.

David Enevoldsen:             I do have quite a few Peeps at home.

Shelley Rosas:                       Of Peeps. Okay.

David Enevoldsen:             I sent her a picture of all my Peeps previously and she saw this. Well thank you for this mountain of Peeps that you’ve brought. Okay, let’s do our did you know.

Josh:                                           You are a man of the people.

David Enevoldsen:             Yeah, of people.

Shelley Rosas:                       The Peeps, yeah.

David Enevoldsen:             That’s Josh, our board op guy. Josh, do you wanna be in on this quiz too?

Josh:                                           Yeah, sure.

David Enevoldsen:             All right. We’ve got a three way contest here. The winner I could say gets Peeps, but there didn’t seem to be a lot of reaction to that when we were talking.

Shelley Rosas:                       No, no, you have the best flavor here.

David Enevoldsen:             We’ll just say that the winner gets some sort of gloating rights or something. All right, I’m gonna do a couple questions and then I’ll get each of your answers. They’re all multiple choice and they’re all somewhat family law related.

                                                      Number one, in ancient Rome, which thing was studied to determine the luckiest time to marry? A, star alignment; B, tarot cards; or C, pig entrails. Shelley.

Shelley Rosas:                       I’m gonna go with pig entrails.

David Enevoldsen:             Okay.

Aaron Berkley:                      I’m going with A.

David Enevoldsen:             Which was star alignment. Then Josh?

Josh:                                           I’m gonna go with A as well.

David Enevoldsen:             Star alignment. The correct answer is pig entrails. Shelley’s got one point so far. Don’t let me down you guys, come on.

Aaron Berkley:                      I think we need more details on that answer.

Shelley Rosas:                       I have an unfair advantage. I’m actually a family law attorney.

David Enevoldsen:             Well yeah, apparently, my understanding is they, and you’ve heard this before in family law?

Shelley Rosas:                       Something about it came up in-

David Enevoldsen:             Really?

Shelley Rosas:                       Yeah, in my class in law school.

David Enevoldsen:             I didn’t hear that in my class.

Shelley Rosas:                       Yeah, and I can’t remember why exactly, but I do remember pig entrails.

David Enevoldsen:             Question number two, why does a groom carry the bride across the threshold of a door when the couple gets to their new home? Is it A, to protect her from demons; B, because she was so tired from the marriage process that her husband has to carry her; C, it’s a display of submission by the bride to the groom. Shelley.

Shelley Rosas:                       Ugh. I feel like I should pick C, but I’m gonna pick A. Even though I know it’s C.

David Enevoldsen:             To protect her from demons?

Shelley Rosas:                       Yes.

David Enevoldsen:             All right.

Shelley Rosas:                       Besides that I won’t vote for C.

David Enevoldsen:             Aaron, what’s yours?

Aaron Berkley:                      I’m going with demons also.

David Enevoldsen:             All right, and Josh.

Josh:                                           I’ll just do the obvious, I’ll go for C. Why not?

David Enevoldsen:             All right, the correct answer is to protect her from demons.

Shelley Rosas:                       Yay.

David Enevoldsen:             Apparently, I was reading about this, there’s this presumption that there were demons that wanted to stop the union and keep the bride with the father, and so the last ditch effort of the demons was they would try to grab the bride as they were crossing the threshold of the new home. The husband would have to stand between the two by carrying her across. Really interesting.

                                                      All right, number three. Which states have a higher divorce rate? Red states, blue states, or are they roughly equal?

Shelley Rosas:                       Absolutely hands down red states.

David Enevoldsen:             Red states for Shelley. Aaron?

Aaron Berkley:                      I’m gonna say they’re equal.

David Enevoldsen:             Okay. Josh?

Josh:                                           I’ll go, I’m gonna go with blue states.

David Enevoldsen:             Correct answer is red states. Apparently red states have approximately a 20% higher divorce rate.

Shelley Rosas:                       The more conservative, the higher the divorce rate. Interestingly, it’s almost like counterintuitive.

David Enevoldsen:             Yeah, it does seem counterintuitive. Now I would point out that this is correlational data, it’s not necessarily functional data.

Aaron Berkley:                      Do you have statistic for marriage percentages in those states? Like which have a higher percent of married couples?

David Enevoldsen:             I don’t know what the distribution is. I do know that marriage rates have been declining recently, and that’s been a significant concern particularly in the red states, but I don’t know what the respective data is off the top of my head. I don’t, again, I don’t necessarily think there’s necessarily a functional relationship between this data, so I don’t think you can say if you’re a conservative you’re more likely to get divorced.

Aaron Berkley:                      Well no, I was just wondering if there was a correlation like if there’s more marriages in red states versus marriages in blue states, that would mean divorces-

David Enevoldsen:             I don’t know what that data is. Like I said, it’s been in decline.

Shelley Rosas:                       It’s still a rate though. It’s per marriage. It’s the divorce per marriage, so it’s still the percentage of people getting divorced in red states that are married versus blue states.

David Enevoldsen:             Okay. Number four, why is a wedding ring worn on the fourth finger of the left hand? Is it A, was the least distracting finger since most people are right handed; B, was believed to be the first finger that caressed your spouse and therefore the most representative of your love; or C, there was a belief that the vein in your finger ran directly up to your heart and was therefore the most representative of your love. Shelley.

Shelley Rosas:                       I’m absolutely going with C, because I think I read this on Facebook.

David Enevoldsen:             Okay.

Aaron Berkley:                      Agreed.

Shelley Rosas:                       Facebook.

David Enevoldsen:             You agree as well?

Josh:                                           Yeah, I agree as well.

David Enevoldsen:             You all got it correct.

Shelley Rosas:                       Yeah.

David Enevoldsen:             All right, number five, who’s more likely to file for divorce in the US? Men, A; women, B; or C, it’s about equal. Shelley.

Shelley Rosas:                       I have no idea on this one, but I’m just gonna go with my personal experience, and I’m gonna say to be the petitioner in a case, more likely to be men.

David Enevoldsen:             Okay, Aaron?

Aaron Berkley:                      I’ll go the opposite.

David Enevoldsen:             You’re gonna go women?

Aaron Berkley:                      I’ll say women.

David Enevoldsen:             All right, and Josh?

Josh:                                           I’ll just go automatic and go C.

David Enevoldsen:             Correct answer is women are more likely in the US to file for divorce. It was actually by, I didn’t write the percentage down, but it was a pretty significant amount. I think it was like two thirds of petitions were initiated by women, nationwide at least.

Shelley Rosas:                       Wow.

David Enevoldsen:             All right. We currently have a tie between Aaron and Shelley, so this will be kind of the tie breaker point. The last question I’ve got here, if a spouse in a marriage smokes, is the couple A, 75% less likely to divorce; B, 75% more likely to divorce; C, 25% more likely to divorce; or D, 25% less like to divorce. Did you guys follow that? Okay, Shelley.

Shelley Rosas:                       25% more likely.

David Enevoldsen:             All right, Aaron?

Aaron Berkley:                      I’ll make it interesting, 25% less likely.

David Enevoldsen:             Josh?

Josh:                                           I’ll have to agree with that, 25% less likely.

David Enevoldsen:             You’re all wrong. The answer is 75% more likely to divorce.

Shelley Rosas:                       Oh wow. Wow.

David Enevoldsen:             Yes, I thought that was interesting. If you’re married don’t smoke, right? There again, I think that’s correlational data, there could be other stuff going on there, but it was a pretty stark number I think. All right, well, we didn’t work on the tie breaker, so we apparently ended up with a tie between Aaron and Shelley.

Shelley Rosas:                       You have two boxes of Peeps, so we can share.

David Enevoldsen:             I do, that’s true. I do. I have many boxes of Peeps now.

Shelley Rosas:                       Yes, but you brought your own too.

David Enevoldsen:             I brought my own Peeps to give as an award to the winner, but nobody seemed real interested in Peeps.

Shelley Rosas:                       Tell him what the flavor is that you have.

David Enevoldsen:             They’re chocolate dipped coconut.

Shelley Rosas:                       Yes, and I wanted to win those.

David Enevoldsen:             Okay, well I could give each of you that. All right, let’s talk about your stuff, Aaron. Let’s talk about bankruptcy.

Aaron Berkley:                      Sounds good.

David Enevoldsen:             First off, let’s just quick discussion about what you do, where you work, what got you into bankruptcy. Tell us a little bit there.

Aaron Berkley:                      Sure. Yep, I do consumer bankruptcy, primarily consumer bankruptcy, mostly chapter sevens, chapter 13’s, and my office is in Tempe. I got into consumer bankruptcy, my father is actually a bankruptcy attorney as well, and I get to work with him every day which is great. What we do is deal with debt.

David Enevoldsen:             Cool. Is just your father being a bankruptcy attorney, is that what got you into it?

Aaron Berkley:                      Primarily, yes, but as I kind of started practicing bankruptcy I found out that it is actually pretty interesting, and the nuances between the different chapters and all of that keep me interested. I do like that.

David Enevoldsen:             Gotcha. Do you guys do anything other than bankruptcy or is that-

Aaron Berkley:                      That’s our main focus.

David Enevoldsen:             Your focus, okay.

Aaron Berkley:                      Yep, that is our main focus.

David Enevoldsen:             Very cool. Then what’s your dad’s name?

Aaron Berkley:                      Martin. Martin Berkley.

David Enevoldsen:             Okay, and has he been working for a while before you were?

Aaron Berkley:                      He’s coming on 40 years practicing.

David Enevoldsen:             Okay, so you guys have quite a bit of bankruptcy experience collectively.

Aaron Berkley:                      Yes.

David Enevoldsen:             I’m guessing there. Just really quick, you said there was a chapter seven and chapter 13, can you explain what that means?

Aaron Berkley:                      Correct, and a chapter seven is the most thought of bankruptcy in the sense that it’s-

David Enevoldsen:             Actually, hold that thought, we’re gonna jump to a break real quick, I’ll finish that question right after.

Aaron Berkley:                      Got it.

David Enevoldsen:             I’m attorney David Enevoldsen, joined by cohost Shelley Rosas and I have my guest Aaron Berkley, a bankruptcy attorney. When we come back we’re gonna be talking more about divorce and bankruptcy. You are listening to Family Law Report on Independent Talk 1100 KFNX.

Announcer:                            Next news in 30 minutes or when it breaks, here on Independent Talk 1100 KFNX.

                                                      Family Law Report is hosted by Family Law Guys, an Arizona family law firm. Family Law Report is dedicated to confronting difficult issues related to marriage, divorce, and children. This can range everywhere from addressing the legalities and controversies of topics like gay marriage to current problems with the divorce system to simply providing tips to those getting married or going through a divorce or custody fight. Tune in every Sunday to Family Law Report at noon here on KFNX. If you wanna know more or to schedule an appointment with David or another one of the Family Law Guys attorneys, call 480-565-8680. That’s 480-565-8680.

David Enevoldsen:             Welcome back to Family Law Report. I’m David Enevoldsen, your host, attorney with Family Law Guys, an Arizona law firm here with you every Sunday at noon on Independent Talk 1100 KFNX. Joined today by my cohost Shelley Rosas, who works for my firm as well, and we also have Aaron Berkley our guest from the Berkley Law Office. If you wanna reach out, schedule an appointment with my firm, Family Law Guys, you can do so at 480-565-8680, or you can check us out on our website at www.FamilyLawGuys.com.

                                                      If you’re listening and you want to call in and ask any questions or share thoughts, you can do so at 602-277-KFNX. Aaron, we’ll give you another plug here, if somebody wants to reach out and contact you, if they have a bankruptcy question or just need to find out more about that process, where can they get ahold of you?

Aaron Berkley:                      Yeah, they can reach me at 480-921-2993. We do offer free consultations for bankruptcy, so if you’re considering it, come in and talk to us, we’ll give you a good idea as to how it works.

David Enevoldsen:             Your website again?

Aaron Berkley:                      It is MJBerkleyLaw.com, and it’s B-E-R-K-L-E-Y.

David Enevoldsen:             Great, thank you. All right, when we were going to break I just started asking you the question, and then I cut you off, my apologies, about the distinctions between there was a couple different types of bankruptcies. There’s chapter sevens and chapter 13’s, can you tell us a little bit about what the distinction is there?

Aaron Berkley:                      Yeah, and a chapter seven is what most people commonly think of when they think of bankruptcy. It’s a straight discharge of debt, so you file a petition, and usually within about 120 days from that date you get a discharge, which is an order from the court essentially wiping out all of the debt or most of the debt. There are certain debts that you can’t get rid of in a chapter seven bankruptcy.

David Enevoldsen:             Basically that’s what we would normally think of, I think just colloquially when we think about bankruptcy.

Aaron Berkley:                      Correct, yeah.

David Enevoldsen:             It’s just, I wipe everything out.

Aaron Berkley:                      Yes. Then chapter 13 on the other hand is a consolidated repayment plan, and it’s based upon a number of factors and pays creditors in certain ways. Chapter 13’s a good tool for stopping foreclosures, paying off cars typically, under a plan where you can maybe adjust the interest rate or get some sort of savings. It also deals with the other debt as well. Those are the two different chapters that most people think of when dealing with bankruptcy.

David Enevoldsen:             Gotcha. I’m assuming there’s other stuff. I actually know there’s other stuff.

Aaron Berkley:                      Yes.

David Enevoldsen:             That deal with like nonconsumer issues in particular, but obviously since we’re talking about divorce, we’ll kind of stay fixated on those two I think for purposes of this discussion. With respect to either these chapter seven or the chapter 13, either the total wipe out or the restructure, kind of create a repayment plan situations, are there any major restrictions, like legal restrictions? We’ll talk about tactical restrictions in a second, but just talking legally speaking, is there any barriers to filing? Can anybody just go do that at any moment? Say, “Screw it, I don’t like my debts, I’m gonna go and file bankruptcy.” What are the barriers?

Aaron Berkley:                      There are income requirements for chapter seven, so most people wanna try to fit into a chapter seven bankruptcy, there’s a means test. The change in the law back in 2005 was forcing people into chapter 13’s more frequently because of larger incomes. Then a chapter 13 you do have to have income to make a repayment plan work, and pay off your debt. There are some restrictions based upon those factors, but as far as filing, any consumer can file.

David Enevoldsen:             Okay. Now, do you need, so let’s say you’re married and you’re contemplating this divorce to kind of get out of your debt, do you need as a technical matter, do you need the consent of your spouse to do that?

Aaron Berkley:                      No, you do not.

David Enevoldsen:             You could just go out and file bankruptcy, and presumably your spouse might not even know, at least on the front end.

Aaron Berkley:                      That’s frequently, unfortunately.

Shelley Rosas:                       It’s threatened frequently as well by a party.

David Enevoldsen:             I’ve heard it in my cases as well, although at that point if it’s being threatened, presumably you know it’s coming.

Aaron Berkley:                      Right.

David Enevoldsen:             I’m saying there’s not at least a technical requirement that you go out and say, “Hey spouse, I’m gonna go file for bankruptcy,” or need their signature on anything. You could presumably get a discharge and not have them consent to anything. Is that a fair statement?

Aaron Berkley:                      That’s fair.

David Enevoldsen:             Interesting. Now, let’s stick with the legal stuff for a second, what kinds of legal mechanisms come into play that could impact a divorce when you file?

Aaron Berkley:                      Well, the timing of a bankruptcy filing I think is always interesting in a divorce context because when you’re dealing with two parties who are essentially splitting up, they have debt, and they’re dealing with debt as a part of the divorce proceeding. It’s always, it tends to be more beneficial if both parties are on the same page and they file a joint bankruptcy to deal with the debt prior to the dissolution of the marriage, because that is one less issue that’s gonna be on the table for the divorce court.

David Enevoldsen:             That, if I could cut you off one second.

Aaron Berkley:                      Yeah.

David Enevoldsen:             That resonates with me quite a bit, because as a family law attorney one of the things we’re often looking at, if you’re going through the process there’s usually a string of different issues. You could deal with things like spousal maintenance and child support, and parenting time for your children, and legal decision making. On top of that, how are you gonna divide up all the assets in terms of who gets the house, who gets the bank accounts, who gets the retirement accounts, all this stuff.

                                                      One of the things I will often tell people is if we can settle some of this stuff, if you can narrow the scope of these issues, even if you can knock spousal maintenance off the table or the child issues off the table, you have way less stuff to deal with if you’re going into a trial. Having way less stuff to go into a trial with, number one that’s gonna reduce the kind of stress and unknowns that you’re dealing with, but on top of that if you’re recruiting attorneys, you’re gonna spend a lot less on them to have to dig up information and prep for the trial. Then the trial itself is probably gonna be shorter, because you’re gonna have a much more narrow scope of the issue.

                                                      What you’re saying right there makes a lot of sense to me, because if you’re in essence agreeing on the front end we’re gonna deal with this discharge of our assets or debts, you’re gonna take a lot of that stuff off the table, and then you can fixate on some other things, like spousal support or just the child stuff. If you could come to agreements there, obviously you’re great. Anyway, I’m sorry, I didn’t mean to cut you off.

Aaron Berkley:                      Yeah.

David Enevoldsen:             It’s just that really sticks with me, because I think agreement if it’s feasible and reasonable makes a ton of sense.

Shelley Rosas:                       What happens if the parties don’t agree? Say there is a mountain of debt. There’s basically no assets, they’re gonna agree on everything about the children, and so the only issue is really on dividing a mountain of debt. One party wants to file bankruptcy because they know it’s really the only option, but the other party does not. What does that look like?

Aaron Berkley:                      Well, when you have one party who’s considering filing for bankruptcy, and you have another party that doesn’t want to, it creates a much more complex issue. We were discussing before the show that a chapter seven bankruptcy isn’t going to be much help. Really if you’re dealing with property settlements was one thing we were kind of discussing before the show, that if one party is supposed to pay somebody, the other party, and they’re trying to get out of doing that by filing a chapter seven bankruptcy, it’s not gonna help them out. They actually have to be in a chapter 13 for that to work.

David Enevoldsen:             Sorry, could you explain that a little more for me? I wanna make sure I got that.

Aaron Berkley:                      Sure, sure.

Shelley Rosas:                       You’re talking if, so once a divorce is over and say the wife has to pay the husband $100,000 because she’s a pediatrician, and she has an interest in a business, and that’s the community interest. There’s been a business valuation done, and it’s basically determined that the wife needs to pay to the husband now as part of a property settlement or an equalization so that he gets his part of his efforts towards the community, $100,000. That’s already been awarded by the judge, so whether it came down in a consent decree or just through trial and through a decree, you’ve got a payment of $100,000 due from one spouse to the other, and now that spouse wants to file bankruptcy.

Aaron Berkley:                      Right, and their intention is to not have to pay that. In a chapter seven context, the court has carved out that that can’t be discharged. You have to deal with it in a chapter 13, and you have to be making payments, and you may be paying a lot of that back over time.

David Enevoldsen:             Now is that true at any moment? That is to say, are we talking about both right after a divorce decree is entered and say like 10 years later or something?

Aaron Berkley:                      Yes.

David Enevoldsen:             It doesn’t matter when it is.

Aaron Berkley:                      Yes.

David Enevoldsen:             Just flatly barred from wiping that stuff out.

Aaron Berkley:                      Yes.

Shelley Rosas:                       Okay, so chapter seven doesn’t help a party to discharge either child support or spousal maintenance or any kind of family support or property.

David Enevoldsen:             We were gonna come back to that.

Shelley Rosas:                       I know, we’ll get to that in a minute. I mean, so basically chapter seven does not help a party in a divorce to avoid paying a debt that’s gonna be owed to another spouse.

Aaron Berkley:                      That’s correct, and the reality is that a chapter seven is a very good context if both parties are on board and you can fit into a chapter seven, and you can deal with the debt before the dissolution of a marriage, or even after, but both parties are on the same page. Then you’re in a really good position to get rid of the debt.

David Enevoldsen:             Let’s say for just a second that you go through and you get the divorce decree, or settlement agreement, or whatever it is. This somehow the final order’s entered, and the parties come together after the divorce and they say they wanna wipe out these obligations. Is that doable?

Aaron Berkley:                      That’s a feasible option, and if the parties are in agreeance, that’s the most important thing.

David Enevoldsen:             Okay.

Aaron Berkley:                      If both parties are in agreeance that they’re gonna file a bankruptcy, and they may have to file separate bankruptcies because they’re no longer married and can’t file jointly, but they get a discharge in each case-

David Enevoldsen:             If they aren’t, then that’s an exception that’s carved out, that the bankruptcy court will say, “You can’t do this.”

Aaron Berkley:                      Right.

David Enevoldsen:             Interesting. That then also supports your assertion that makes a lot more sense to get a bankruptcy before the divorce, or at the beginning of the divorce, rather than later on.

                                                      All right, we’re gonna take another quick break. I’m attorney David Enevoldsen, joined by cohost Shelley Rosas and guest Aaron Berkley, a bankruptcy attorney. When we come back we’re gonna be talking more about divorce and bankruptcy. If you wanna call in with any questions, you can do so at 602-277-KFNX. You’re tuned into Family Law Report in Independent Talk 1100 KFNX.

Announcer:                            Family Law Report is hosted by Family Law Guys, an Arizona family law firm. Family Law Report is dedicated to confronting difficult issues related to marriage, divorce, and children. This can range everywhere from addressing the legalities and controversies of topics like gay marriage to current problems with the divorce system to simply providing tips to those getting married or going through a divorce or custody fight. Tune in every Sunday to Family Law Report at noon here on KFNX. If you wanna know more or to schedule an appointment with David or another one of the Family Law Guys attorneys, call 480-565-8680. That’s 480-565-8680.

David Enevoldsen:             All right, welcome back to Family Law Report. I’m David Enevoldsen, your host, attorney with the Family Law Guys, an Arizona law firm here with you every Sunday at noon on Independent Talk 1100 KFNX. Joined today by my cohost Shelley Rosas, who works for the same firm as myself, and our guest Aaron Berkley, who’s a bankruptcy attorney from the Berkley Law Office.

                                                      You wanna reach out and schedule an appointment with our firm, Family Law Guys, you can do so at 480-565-8680, or you can check us out on our website at FamilyLawGuys.com. Www.FamilyLawGuys.com. Pretty sure you could probably just type in FamilyLawGuys.com and it would still get you there. If you’re listening you wanna call in and ask us any questions or share thoughts, you can do so at 602-277-KFNX and Aaron, if somebody wants to reach out and schedule a consult with you or otherwise find out some more information, how would they do so?

Aaron Berkley:                      Give me a call, 480-921-2993. We do free consultations, and you can also check out our website, MJBerkleyLaw.com, and that’s B-E-R-K-L-E-Y.

David Enevoldsen:             All right. Thank you. When we dropped off to break on the last segment, we were talking about it sounds like some significant barriers to trying to just get out of some marital debts in essence if you were to just go and file bankruptcy right after you get your divorce decree.

                                                      Now, I know from the family law context there are some barriers as well. For example, there is case law in Arizona on the family law side that says if somebody was gonna go in, there’s a case from 2004 called Burt v. Burt, and in that particular case the court said, there was a situation where somebody entered a property settlement agreement, and then jumped out. I guess this makes sense too because it’s 2004, right before the amendments you were talking about, because the amendments from 2005 are what changed this rule that made it more difficult to wipe out stuff.

Aaron Berkley:                      That’s right.

David Enevoldsen:             By nonconsent, right? Well, this case was from 2004, and it essentially said that if somebody was going to try to do that, to sort of play the legal game and say they enter a property settlement agreement, that they know they’re just gonna jump over to the bankruptcy court right after the decree is entered and then try to wipe it out, the family court has the ability to reopen the divorce. Keep in mind that in a lot of contexts you can’t do that. Usually there has to be some significant grounds to do that, otherwise things are frequently just as they are in the divorce decree.

                                                      The family court can go in and reopen the case, and then remodify how things are being allocated to prevent or mess up this whole divorce or offset stuff. There are family court mechanisms preventing you from playing that sort of tactical game with the debts as well as there are in the bankruptcy court. Now it sounds like since 2005 in addition to that you have barriers from the bankruptcy court, so all around it sounds like trying to play this tactical game of just messing with the debts, and trying to get something, and then wiping it out later through BK is not the way to go.

                                                      Sounds like everybody agree with that?

Shelley Rosas:                       Yeah, I think it’s important though to talk about the chapter 13. If someone then, a party, decides to file a chapter 13 bankruptcy it’s possible that they could discharge or have a consolidated payment plan, or pay much less. Say there was $100,000 debt, it might be knocked down to 25, and 75 ends up discharged, right? Because there’ll be a consolidated payment plan.

                                                      A chapter 13 could kind of technically help a party trying to avoid paying part of a property settlement only?

Aaron Berkley:                      Yes, and in a chapter 13 context, that’s the only way that you would be able to essentially discharge that debt. It would have to be absolutely determined to be a property settlement, and not in the nature of support.

David Enevoldsen:             Okay. That segways us into a whole nother question we were gonna talk about.

Shelley Rosas:                       This is I think really important for people out there to understand. Why don’t you talk about the family support duties and how those relate to bankruptcy.

Aaron Berkley:                      Domestic support obligations are highly protected in the bankruptcy context in the sense that they never go away. It’s something that you always have to deal with, even if you’re in a chapter seven bankruptcy where you’re just wiping out the debt. It’s not gonna be discharged. If you are in a chapter 13 and you’re looking at trying to pay back your debt, at least some portion of your debt, you’re always gonna be paying the domestic support obligation if it’s in arrears, essentially.

David Enevoldsen:             In full.

Aaron Berkley:                      In full.

David Enevoldsen:             Okay, so just to kind of reword that to make sure I’m using a little bit less legalese here, because I think we’re all lawyers so we have a tendency to use fancy words. What you’re saying is that if you have money that you owe for back child support or if you have money that you owe from back alimony or spousal support, you can’t just run to the bankruptcy court and wipe that out. Like it stays forever.

Aaron Berkley:                      That’s correct.

David Enevoldsen:             Right. Is that also true in the chapter 13 context? This is the repayment plan sort of scenario.

Aaron Berkley:                      Yes. A chapter 13 can be beneficial when you’re dealing with domestic support obligations because it can temporarily stay a collection, maybe like a garnishment or something like that that’s going on, where you can voluntarily set up a repayment plan to deal with those arrears or the missed payments that you’ve had in the past, and kind of bring those current over time in your plan. It’s a good way to deal with support arrears, because they will never go away. They have to be dealt with.

David Enevoldsen:             Anybody that’s not familiar with the term, that’s the back child support or back spousal support that you haven’t paid.

Shelley Rosas:                       Say there’s a current order and I have to pay my ex-husband $800 a month. Can the bankruptcy court say, “Nope, you only have to pay him 400 now because you don’t have enough money”?

Aaron Berkley:                      If it’s a court order, that’s what you’re dealing with out of the family law court.

Shelley Rosas:                       It would stay the 800.

Aaron Berkley:                      Correct, and another thing is that you can’t get your chapter 13 plan approved by the court unless you’re current on post petition, after you file your case, support. You have to stay current on your support while you’re in bankruptcy, especially in a chapter 13 context, or you won’t be able to get through the process.

David Enevoldsen:             It seems to me then if you had a support obligation, child support or spousal support, that you weren’t able to keep up with before you go file for bankruptcy of any sort, or particularly the chapter 13, the reorganization repayment plan version of the bankruptcy, you would wanna run back to the family court and get your support obligations under control if it’s something that you just cannot manage no matter what.

Aaron Berkley:                      That’s the best way is to deal with it in the family court.

Shelley Rosas:                       Basically the family support duties are never dischargeable either under chapter seven or 13, and I think it’s important to define the family support duties as spousal maintenance, some people might have heard of it as alimony.

David Enevoldsen:             In Arizona we call it spousal maintenance.

Shelley Rosas:                       We call it spousal support.

David Enevoldsen:             Colloquially everyone refers to it as alimony.

Shelley Rosas:                       Yes, or spousal maintenance and child support duties are not dischargeable.

Aaron Berkley:                      That’s correct.

Shelley Rosas:                       Thank you.

David Enevoldsen:             What about attorneys fees that are awarded by the family court?

Aaron Berkley:                      We all seem to be interested about that.

Shelley Rosas:                       Yes, we do.

David Enevoldsen:             Well, just as a background here, well actually let me back up the question just a sec and ask you a different question just to clarify. Are you saying that in the reorganization version, the chapter 13 that it’s the same basic rule, that even though you can restructure and reorganize how payments are going out, the chapter 13 version, this reorganization repayment plan system, you don’t get to wipe out past support obligations.

Aaron Berkley:                      That’s correct.

David Enevoldsen:             Correct, okay.

Aaron Berkley:                      It needs to be paid through your reorganized plan.

David Enevoldsen:             However, if you are doing the chapter 13 and you had some sort of other obligation, like just an equalization payment or something like that, some other debt that’s coming out of the divorce that isn’t a support obligation, that could be partially knocked off. Is that right?

Aaron Berkley:                      That’s correct, yes.

David Enevoldsen:             Okay. Whereas with the chapter seven you can’t wipe it out at all unless you’ve got the consent of your ex-spouse, essentially.

Aaron Berkley:                      And possibly another bankruptcy, if both parties are filing bankruptcy than you can deal with that issue.

David Enevoldsen:             Got it. Okay. Now, let’s jump back to the question I was asking a second ago, the attorneys fees. Tell me about attorneys fees. If we go through a family court process, sometimes at the end of a family court case there’s a few different basis for which this can happen. In the family court context it can either be disparities of income, like one party’s making way more than the other one, and the court says we’re gonna offset those costs, or sometimes if somebody’s acting unreasonably as the court likes to say or as the statue says, then the other party might get a award of attorneys fees.

                                                      What can happen is you get through the whole process, you get to your divorce, and then the judge will say, “Okay, wife, you’re gonna pay husband X thousands of dollars for attorneys fees,” or vice versa, “Husband, you’re gonna pay the wife for X thousands of dollars.” They enter a judgment against the other party.

                                                      When you have that situation, so you’re walking out of a divorce with that judgment, and you try to go and get a bankruptcy that does something with that judgment, what are the implications of that?

Aaron Berkley:                      Well, if those attorneys fees were awarded out of the family law court, and they were awarded for the nature of support, that’s kind of the key word is in the nature of support, then they are nondischargeable, you can’t get rid of them. It’s actually almost treated as if it’s a part of that domestic support order, so it’s very hard to get rid of attorneys fees that are awarded to be paid by one party because usually it’s in the nature of support.

David Enevoldsen:             Okay. That meaning then if the attorneys fees were accrued for purposes of getting like a child support order or a spousal support order or something else, okay. Real quick, one more question, just to make sure we’ve talked about it. There’s an automatic stay. Can you tell us very quickly what that’s about?

Aaron Berkley:                      The automatic stay is sort of a shield or a safety net that comes out, as soon as you file your bankruptcy petition. That protects you against collection from creditors. The one thing that it does not stay is a lot of these family court issues like paternity, child support, alimony, that stuff can still take place.

David Enevoldsen:             Otherwise it would freeze up the case, so if you had a like civil suit or something like that.

Aaron Berkley:                      Right, right, right.

David Enevoldsen:             All right. Well, that’s about all the time we have for today’s show. You have been listening to Family Law Report, I’m David Enevoldsen, attorney with Family Law Guys, an Arizona law firm. I’ve had with me cohost Shelley Rosas and guest Aaron Berkley. Real quick, drop your number of somebody wants to get ahold of you.

Aaron Berkley:                      You can reach me at 480-921-2993, and my website’s MJBerkleyLaw.com.

David Enevoldsen:             All right, we’ve been talking about bankruptcy and divorce, and if you wanna find out more, reach out to Aaron or myself, or my firm, join us again next week on Sunday at noon for more of the latest on family law here on Independent Talk 1100 KFNX. Thanks for listening.

Announcer:                            Family Law Report is hosted by Family Law Guys, an Arizona family law firm. Family Law Report is dedicated to confronting difficult issues related to marriage, divorce, and children. This can range everywhere from addressing the legalities and controversies of topics like gay marriage to current problems with the divorce system to simply providing tips to those getting married or going through a divorce or custody fight. Tune in every Sunday to Family Law Report at noon here on KFNX. If you wanna know more or to schedule an appointment with David or another one of the Family Law Guys attorneys, call 480-565-8680. That’s 480-565-8680.

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