Skip to main content
  1. Life
  2. Family & Parenting
  3. Family

Property Division and Bankruptcy

See also

Parties to a Dissolution of Marriage must enter into a separation agreement dealing with issues of parental rights and responsibilities, child and spousal support. Division of property and debt must also be resolved.. The separation agreement, when approved by the court becomes part of the decree of dissolution.

A separation agreement is a contract. To be enforceable, the contract must have been entered into voluntarily without duress, coercion, undue influence or fraud. The terms of a separation agreement incorporated into a decree of dissolution may favor one party or the other. So long as the agreement was freely entered into, and the parties acknowledge their satisfaction with the terms, it will be approved by the Domestic Relations Court.

Under current Ohio law, parties may by agreement, later modify their property division. Absent agreement by the parties, a property division may not be modified. A later bankruptcy filing by one of the parties to a separation agreement may, however, change the property division the parties intended.

In a recent United States Sixth Circuit Court of Appeals case known as In Re Neal, the bankruptcy trustee sought to set aside the transfer of assets from wife to husband pursuant to their separation agreement, as being fraudulent. Wife filed for bankruptcy shortly after the parties were granted a dissolution of marriage which incorporated their separation agreement. The trustee argued that wife had received less than reasonable value for the assets she transferred to husband and the marital debt she assumed,

Under bankruptcy law, a trustee may seek to be set aside any transfer of the bankrupt's property made within two years of the bankruptcy filing. The trustee must show that the value received for the property transferred and the marital debt assumed was less than “reasonably equivalent value.” In Neal, despite the parties having freely entered into the agreement and the Domestic Relations Court having approved the agreement, the trustee was successful in obtaining an order requiring husband to pay reasonable value for the assets he received and half of the marital debt wife assumed.

Parties to a separation agreement may not contemplate a modification of their property division, but a subsequent bankruptcy may cause an involuntary change.



  • Dead babies found
    Seven dead babies were found in Utah resident Megan Huntsman's old home
    Shocking Discovery
  • Kendall Jenner
    Get the Coachella looks: Kendall Jenner’s nose ring, green hair and edgy nails
    Coachella Look
  • Dog's Easter basket
    How to fill your dog’s Easter basket with the perfect toys
    Easter Basket
  • Rabbit owners
    Bringing home the bunny: Important information for rabbit owners
    7 Photos
  • Haunted island
    The world’s most haunted island may soon be the most haunted luxury resort
    Haunted Resort
  • Sunken ferry
    Search continues for missing passengers after a ferry sinks off the South Korean coast
    Sunken Ferry

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about and apply today!