• Your ex-spouse filed bankruptcy.
• You educated yourself and learned what types of divorce debt are discharged and not discharged?
• You and your attorney decided to file a claim in your ex-spouse’s case.
• So what happens now?

It depends on the type of bankruptcy. Here’s a rundown.

Chapter 7

In a Chapter 7 case, the trustee will review the claim to determine that it is appropriate and complete. If the trustee is satisfied with the claim, he will put it in line for payment.

If he is not satisfied with the claim, he may file an objection. See the section below on “Objections to Claims.”

The trustee will pay the claim according to certain rules found in the Bankruptcy Code. Certain debts are considered to have priority and are paid before other lesser debts. Domestic support obligation debts are a high priority. Other divorce-related debts may have a lower priority.

Just because the debt has a high priority doesn’t mean that it will be paid in full. There may not be enough in the asset pool to pay it in full, or the debt may have to share in the pool with other priority debts like taxes. If that is the case, you may not be paid your full claim.

If a balance remains after you’ve been paid by the trustee and your debt is dischargeable, you will not be able to collect it after the bankruptcy case. If, however, the balance is non-dischargeable, you will be able to take whatever collection action you’re allowed under your state’s laws.

Please be mindful, however, that it often takes months or even years in a Chapter 7 case for the trustee to collect assets, sell the assets, review claims and determine payment priorities.

Therefore, it will likely takes months, and maybe even years, before you see any return on your claim in a Chapter 7 case.

Chapter 13

In Chapter 13 cases, payment usually comes much faster than either a Chapter 7 or Chapter 11 case. A Chapter 13 debtor will propose a plan to pay debts on a monthly basis starting the month after the case is filed. In the early months of the case, the Chapter 13 and the creditors will review the plan to make sure that the debtor has enough income to cover the payments. This is called the “confirmation” process. Confirmation may take up to a year, but It is usually shorter. The Chapter 13 trustee will also have to approve the claims filed in the case (see the discussion below about objections to claim). Once the plan and the claims have been approved, the trustee will start sending out payments to the creditors on a monthly basis.

If your claim is for a Domestic Support Obligation, for instance past-due child support, that claim will have to be paid in full by the end of the plan, and your Ex will have to keep up all the payments that come due during the Chapter 13 case, or he will lose his right to a discharge at the end of the case.

Learn more at Domestic Support Obligations in Chapter 13.

Chapter 11

Chapter 11 debtors also propose plans, but those plans are often not filed until months into the case and can provide for virtually any terms you can imagine. The confirmation process for a Chapter 11 plan can be long and hard fought. Like Chapter 7, it may be months or even years before you see anything on your claim.

What if the trustee or my ex files an objection to my claim?

If there is something wrong with your claim or it does not include the information necessary to prove that the debtor owes you money or for any other reason that would make the claim objectionable, the Chapter 7 trustee will file an Objection to Claim.

In a Chapter 13 case, the trustee and the debtor will review the claim. Either one can file an objection to the claim.

The objection to the claim may be set for hearing before the bankruptcy judge. Often, the court will set a deadline for you to respond or fix the deficiencies in the claim. If you fail to take any action at that point, the court will likely enter an order in favor of the trustee or the debtor that will change or even disallow your claim. 

The court may set the claim for a hearing before the bankruptcy judge. If that happens, at a minimum you will need to attend the hearing. Filing a response with the court before the hearing may also be necessary.

Even if you did not have an attorney assist you with filing the claim, you will want an attorney to help you respond to the objection. It can be very difficult to know what to do to correct errors or what information needs to be included.