What techniques can minimize or avoid the effects of a bankruptcy in a Virginia separation or divorce?
There are a number of techniques savvy divorce counsel can employ to minimize or avoid the effects of a bankruptcy when his or her client is separating or divorcing in Virginia. Two of the least effective, yet most common, approaches favored by divorce lawyers in the greater Richmond metropolitan area, including Chesterfield County, Hanover County, Henrico County, and the City of Richmond in separation agreements or property settlement agreements, are to declare all obligations to be support and/or to state that the agreement represents a bargained for exchange which creates support obligations. These two approaches ignore three important aspects of bankruptcy law: (1) that labeling an obligation as a “domestic support obligation” does not make it a “domestic support obligation” as defined in the Bankruptcy Code; (2) that prepetition agreements, including an agreement that a debt be treated a certain way, may still be discharged in bankruptcy; and (3) that not every legal obligation un
