Can a Bankruptcy Trustee Avoid a Divorce Settlement?

Full Question:

I am married, undergoing the lats few months of a bankruptcy, but am completely unhappy. Friends have offered me a place in their country with a possibility to start over, but it's a limited time offer. I'd like to just leave and file for divorce after I leave to avoid the horrendous arguments I know would ensue, but don't know how that would affect the bankruptcy, or the division of property. I don't want anything - he can have the house, etc. I just want my car, my pets and a few personal belongings. I know that the trustee has the right to deny or delay a divorce until after a bankruptcy is finished but honestly, each day is more and more painful here, as we don't have, and haven't had, what I would consider a marriage in years.
08/26/2011   |   Category: Bankruptcy   |   State: Tennessee   |   #25405

Answer:

The answer will depend on all the facts involved, such as whether you filed Chapter 7 or 13, and whether the assets and liabilities you listed in bankruptcy or separate or marital property. The non-dischargeable debts listed in § 523 include, among others, alimony, child maintenance or support, and certain debts arising out of a divorce decree or separation agreement.
A broader range of debts are dischargeable under Chapter 13, including debts arising from property settlements in divorce or separation proceedings. A "divorce lien" is a lien against the marital home held by the ex-spouse not in possession of the home. The question of whether the lien avoidance provision of the Bankruptcy Code applies to divorce property divisions' is unclear due to the variety of theories courts have used to support decisions.

In Chapter 13, the trustee is responsible for receiving monthly payments and disbursing them to creditors in accordance with your repayment plan. The trustee will review the proposed divorce settlement agreement along with the incomes of each spouse before deciding if the divorce settlement is acceptable.

Please see also:

http://assets.wne.edu/161/14_note_Bankrupt.pdf
http://www.divorcesource.com/info/bankruptcy/bankruptcy.shtml