Is a pre-nup enforceable if the party who has to shell out the money declares bankruptcy?
Short answer is yes and no. Let me explain.
A prenuptial agreement is an enforceable contract between two parties entering into a marriage even if a party files for bankruptcy. Filing bankruptcy only means that a party may possibly not have to pay back a debt that is owed depending on the chapter of bankruptcy is filed and whether a discharge is entered by the court. Remember, filing for bankruptcy is not the same thing as receiving a discharge.
The pre-nup typically outlines the division of assets and liabilities should the marriage end in divorce. In the event that one of the parties declares bankruptcy, the prenuptial agreement may still be enforceable, depending on the circumstances.
If the party who is obligated to pay out money in the prenuptial agreement declares bankruptcy, his or her creditors may be able to take the assets specified in the prenuptial agreement. This is because the prenuptial agreement is a contract, and in a bankruptcy proceeding, creditors can challenge contracts that are deemed to be overly one-sided or financially burdensome. The creditors may also try to invalidate the prenuptial agreement if the terms of the agreement were not disclosed to the other party prior to entering into the contract.
For example, if the party who is obligated to pay out money in the prenuptial agreement has declared bankruptcy, the other party may also have difficulty enforcing the agreement. This is because the party who has declared bankruptcy may be able to discharge the debts in the prenuptial agreement through the bankruptcy proceedings.
In order to get an accurate answer to your question, you need to speak with a licensed attorney in your jurisdiction who reviews your specific contract as well as the information about the bankruptcy filing, including the statements, schedules and related bankruptcy documents.
Hope that helps.
If you need a lawyer in Utah, try this one:
Jeremy Eveland
17 North State Street
Lindon UT 84042
(801) 613-1472
Comments
Post a Comment