Question: I am currently looking at personal bankruptcy due to large unsurmountable personal debt. I am anxious to get the process started but am also in the midst on a divorce trial commencing within the next month. My question is: If I start the banruptcy process now and find during my divorce trial that I owe a equalization payment, can that be included in my bankruptcy? Essentially, if it is found that I owe this payment it would be based on assets as of the valuation date (October 2004) that do not exist now.
Answer: In most cases the answer is yes, equalization payments are a debt that is included in bankruptcy. However, in divorce proceedings there are many factors that may change that answer.
For example, court ordered support payments are not discharged in a bankruptcy. The wording of the eventual court order will therefore determine what can be discharged in a bankruptcy, and what can’t.
This is a very complex legal matter, so you should discuss this in detail with your lawyer and a bankruptcy trustee before you decide whether or not bankruptcy is the correct option for you.