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Initial Case Management Conference in Dakota County

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In Dakota County (and many other counties in Minnesota), if you or your spouse have filed for divorce and opened a court file, but you have not yet reached agreement on all issues of your divorce, your first court date will likely be the Initial Case Management Conference (ICMC).

You might be wondering what will happen at the ICMC. For a lot of people, it is their first time ever actually going to court, so it feels scary. Luckily, ICMC is not scary. You (or your attorney) will need to fill out the ICMC Data Sheet ahead of time, and will need to bring it to your ICMC along with any required documents (tax returns, paystubs, etc.).

The main point of ICMC is to learn about different ways that your divorce can proceed. There are 2 different “tracks” by which your divorce can proceed: (1) the traditional litigation track; OR (2) the Early Neutral Evaluation (ENE) process.

Parties are strongly encouraged to participate in the ENE process. During the ENE process, the parties (and their lawyers) meet with an evaluator (or more than one evaluator) to resolve their financial and/or custody and parenting time issues. A large majority of cases settle during or as a result of ENE.

Choosing to participate in ENE instead of initially choosing the traditional litigation track tends to be more cost-effective as well.

Elizabeth Rosar Chermack is a Dakota County Family Law Attorney, and can represent you in your divorce or custody case.   Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with her.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

If my spouse & I agree on all the terms of our divorce, do I still need a lawyer?

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Even if you and your spouse have reached an agreement on all the terms of your divorce, it is still important to consult with an attorney. On many occasions, I have consulted with someone who has reached an agreement with their spouse on many of the terms of their divorce, but they have forgotten about a couple of decisions that need to be made.

An experienced attorney also has the ability to suggest specific language or wording to put into your divorce paperwork that will make things go more smoothly in the future.

Unfortunately there have been times when people have decided not to consult with an attorney before getting divorced, and when they DIY-ed it, they left important things out of their paperwork. A year or two down the road, they find themselves in a dispute with their ex-spouse, and spending a lot of time, energy, and money on the post-decree dispute. Often the dispute could have been avoided if they had more carefully drafted their initial divorce paperwork.

If you and your spouse are getting divorced in Minnesota, and you have reached an agreement on all areas of your divorce, you may be able to hire an attorney to represent you for a flat fee in an uncontested divorce.

Elizabeth Rosar Chermack is a Minnesota Divorce Attorney, with an office in Burnsville, and can represent you in your divorce.  Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with Liz.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

How Does Bankruptcy Affect Divorce-Related Debts?

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If you or your spouse may file bankruptcy after you divorce, it is important to know how bankruptcy affects some common issues in divorces.

Prior to 2005, a debtor who was able to show an inability to pay for property settlement debts was able to have those debts discharged in a bankruptcy. This is no longer the case, and thus every type of obligation to a spouse, former spouse, or child of the debtor is non-dischargeable. See 11 U.S.C. §523(a)(5). See also 11 U.S.C. §523(a)(15).

This means that child support obligations, spousal maintenance (alimony), and property settlements are generally non-dischargeable in bankruptcy.

From a practical standpoint, though, as I discussed in my previous post, one spouse may still be “on the hook” for a debt that the other spouse is obligated to pay under the property settlement of the divorce decree. If the debt is in both spouses’ names, but the husband is obligated to pay for it under the divorce decree, if the husband doesn’t pay it, the wife will still have to answer to the creditors. Thus, if the husband is not paying the debt that he is obligated to pay under the divorce decree, and it is negatively affecting the wife’s credit, the wife may either need to pay that debt herself or file bankruptcy in order to begin to rebuild her credit. The wife may also have a cause of action for contempt against her husband.

Marital liens in real estate become property of the bankruptcy estate, because the bankruptcy code provides that “all legal or equitable interests of the debtor in property as of the commencement of the case” are property of the bankruptcy estate. See 11 U.S.C. §541(a)(1).  This means that the trustee in a Chapter 7 bankruptcy case will often try to sell the marital lien interest. These liens may be sold at a discount. Thus, the debtor may be able to buy it back from the trustee.

In a Chapter 13 bankruptcy, a debtor must pay all amounts that he or she is required to pay under a domestic support obligation. Such obligations become due and payable after the petition is filed, and failure to make those payments is grounds for dismissal or conversion of the case. See 11 U.S.C. §1307(c)(11).

In order for a Chapter 13 plan to be confirmed, a debtor’s plan must provide for full payment of domestic support payments. This is because domestic support payments are a priority claim. See 11 U.S.C. §507(a)(1)(B). A Chapter 13 plan that does not provide for full payment of this priority claim is only allowed “if the plan provides that all of the debtor’s projected disposable income for a 5-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan.” See 11 U.S.C. §1322(a)(4).

In conclusion, bankruptcy generally does not have a huge impact on divorce-related debts, because of the protections provided by the bankruptcy code for spouses, former spouses, and children of the debtor.

Minnesota Bankruptcy and Divorce: When to File Bankruptcy

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If a divorcing couple decides that they need to file for bankruptcy, they have two more decisions to make:

(1) Should they file before or after they divorce?

(2) Should they file jointly?

If the couple is filing for Chapter 7 bankruptcy and their debts are joint debts, it usually makes sense from a financial and emotional perspective to file jointly before they divorce.

Why does it make sense from a financial perspective?

Attorney Fees. The couple can hire one attorney to represent them in their joint bankruptcy case. Typically, bankruptcy attorneys charge less for a joint Chapter 7 bankruptcy case than they charge for two separate individual Chapter 7 cases.

Filing Fee. Currently, the Chapter 7 bankruptcy filing fee is $299. A married couple filing a joint Chapter 7 bankruptcy petition will only have to pay for one filing fee. If the two parties filed for Chapter 7 bankruptcy separately, they would each have to pay the $299 filing fee.

Divorce legal fees. If the parties have filed for Chapter 7 bankruptcy jointly before beginning to work with their divorce attorneys, the parties will have less to decide (and argue about) during the divorce process. If the parties have accumulated a large amount of debt together, then that debt will have to be dealt with during the divorce process.  This generally results in higher legal fees.

Means Test. In order to file for Chapter 7 bankruptcy, the party or parties must satisfy the means test. The means test is based on the party’s income. In order to pass the means test, the debtor’s income must be below the median income for the debtor’s household in the debtor’s state.

If the parties file a joint petition before they divorce, it may be easier for them to satisfy the means test and be able to file for Chapter 7 bankruptcy, even though one of the parties may not have been able to satisfy the means test on their own.

Property Exemptions. The parties will be able to exempt more property if they file jointly than if they file separately.

Eliminating the problem of collection and contempt actions. Bankruptcy law does not allow a divorcee to discharge debts ordered in the divorce, but one problem that commonly comes up is a party’s failure to follow the divorce decree.

For example, if the couple’s debts are marital debts, but they are only in one spouse’s name, the couple’s divorce decree will order the parties regarding the division of this debt. It is important to remember that this decree is valid and enforceable between the spouses and the divorce court. However, the divorce decree will not alter the parties’ contract with the creditor.

Thus, if the debts are in the husband’s name, but the wife is ordered to pay part of these debts in the divorce decree, and the wife doesn’t pay her share, the husband is still “on the hook” with the creditor for those debts. The husband will be able to bring a contempt action against his ex-wife for her failure to comply with the divorce decree, but that will cost him money and take time. Also, if the ex-wife does not have the money to pay what she owes the creditor at that time, the husband’s credit will still be damaged and the creditor may take collection actions against him.

Why does it make sense from an emotional perspective?

Moving on with your life. Both divorce and bankruptcy are major life-altering events. If you are divorcing your spouse, and getting a “fresh start”, it might also be nice to have your debts discharged (if filing for bankruptcy makes sense in your situation).

What are some of the downsides of filing Chapter 7 bankruptcy jointly before the divorce?

The blame game. If issues arise during the bankruptcy process that may affect the outcome of the case (possible fraud, for example), the parties will likely play the “blame game” with each other.

Individual needs. It may make sense for one spouse to use the state exemptions and the other spouse to use the federal exemptions. This cannot be done if the parties are filing a joint Chapter 7 bankruptcy.

Cooperation and communication. People who are getting divorced are often doing so because the parties struggle with communication and are not able to cooperate. Filing a joint Chapter 7 bankruptcy requires the parties to cooperate with one another and to have good communication skills. Before a divorcing couple decides to file a joint Chapter 7 bankruptcy, they should evaluate their ability to act civilly towards one another.

What about Chapter 13 bankruptcy?

Generally, it is better for a divorcing couple to wait until after they divorce to file for Chapter 13 bankruptcy, and to file separately. Chapter 13 cases last a lot longer than Chapter 7 cases – they can last up to five (5) years. If the couple files jointly, then they will have to cooperate during that entire Chapter 13 case AND make joint payments.