Expert: Mark J. Markus- California Bankruptcy Attorney - 3/8/2010

Question
I have just recently had a family court judgment in our favor for the amount of $40,000 made against my ex-husband who has not paid child support for two years.  I am also in the middle of litigation and will soon get a judgment against him for an additional $80,000 due to assets he hid during his divorce. that he failed to pay according to his divorce decree, and we are reasonably sure we will soon get a judgment for that amount as well.  He currently has no means to pay any money towards this judgment.  He has no assets and is unemployed.

His failure to pay what he owes is the reason we have been forced to declare bankruptcy.  We have no confidence that he will pay these amounts any time soon, but we are reasonably certain that he will be able to pay at some point maybe years in the future.

We are planning to file Chapter 7 bankruptcy.  We have no other assets beyond a small amount of equity in cars, our house and our household possessions.  

My question is this:  Will our creditors want to take ownership of this debt that is owed to us?  Since we are in the middle of litigating the rest of it and the outcome is uncertain, will the creditors be interested in that outcome and want to pursue the rest of that judgment as well?

Thank you -

Answer
The answer depends on the exemptions laws of whatever state or jurisdiction applies to your case.  To see more on exemption laws, please visit http://www.bklaw.com/exemptions.html

Whatever is owed to you on the date your case is filed (regardless of when a court makes that determination) is an asset of your bankruptcy estate, and the Trustee can liquidate (sell) that asset if you don't have exemptions protecting it.

In most states, they allow an exemption on any alimony or support obligations up to the amount "reasonably necessary for your maintenance and support, and for the maintenance and support of any dependents", but as I said, this varies from jurisdiction to jurisdiction.