How to Set Boundaries in Divorce?

Going through a divorce can be a challenging and disruptive process that can disrupt your life, even after all the papers have been signed and the divorce has been finalized. The process may become particularly difficult to navigate if you and your former spouse do not establish clear boundaries. This can make it easier for both of you to move forward, help your children adjust to the divorce, and avoid ongoing conflict.

What Are the Different Types of Boundaries That May Need to Be Set?

Every divorce is unique, and couples may need to prioritize certain boundaries over others based on the circumstances of the divorce. The following are examples of boundaries that you may need to establish in order to make the divorce process go as smoothly as possible:nPhysical Boundaries: This allows you to create space between you and your former spouse. Whether you continue to live together while you navigate the divorce process or one of you moves out, it is important that you put some physical distance between the two of you. If you do need to remain in the home together for financial reasons, it is highly recommended that you sleep in separate rooms and put distance between the two of you when possible. This should be a top priority if your spouse has been physically abusive over the course of your marriage.nEmotional Boundaries: Once you have made the difficult decision to get a divorce, establishing emotional boundaries is crucial to protecting your mental health. This can help you manage your emotions and prevent discussions from becoming heated. There are several strategies for establishing emotional boundaries, including limiting conversations between you and your spouse that could cause emotional distress or only discussing the divorce at certain agreed-upon times. A therapist or counselor can help you establish and maintain these boundaries.

How Do I Discuss Boundaries with My Spouse?

Unless your divorce is amicable, any communication with your spouse may be fraught with anger, resentment, and stress. Initiating a conversation about boundaries may seem like a daunting task. The following tips can help you broach the topic and have a productive conversation:nChoose a neutral location where you feel comfortable and safe. Do not have a conversation about setting boundaries if one or both of you are tired, stressed, upset, or distracted.nPrepare for the conversation by thinking about the boundaries you want to establish and how to do it. Consider writing your thoughts down or creating an outline of the points you would like to communicate.nBe clear about the boundaries you want to establish and provide specific examples, if possible. This can help avoid misunderstandings.nBe an active listener during your conversation, and make an effort to understand your spouse’s thoughts about certain boundaries. Be willing to make compromises if necessary.

What if My Former Spouse Violates the Boundary?

Ideally, you will both agree to the recommended boundaries and avoid any future conflicts. However, if your ex does violate a boundary, there are steps you can take, including the following:nReiterate the boundaries you both agreed to.nEstablish consequences for violating a boundary.nSeek support from experts like a family counselor or a divorce lawyer.

Can I File for Bankruptcy Without Losing My Retirement Savings?

If you’re struggling with overwhelming debt, the idea of filing for bankruptcy might feel like a last resort. But if you’ve worked hard to build your retirement savings over the years, you may be wondering: Will filing for bankruptcy put my 401(k), IRA, or pension at risk?

This is a common and understandable concern—and fortunately, the answer is often reassuring. In most cases, your retirement savings are protected in bankruptcy. However, there are a few important details to understand before moving forward.

At Lyons & Associates, we work with individuals and families across New Jersey to help them navigate bankruptcy while protecting the assets they’ve worked hard to earn. Here’s what you need to know about how bankruptcy affects retirement accounts.

Retirement Accounts Are Largely Protected by Law

Under federal law, most tax-advantaged retirement accounts are exempt from the bankruptcy estate. This means they are protected from creditors and cannot be taken to pay off debts.

The following types of accounts are generally protected:

401(k) accounts
403(b) plans
IRAs (both traditional and Roth)
Defined benefit pensions
Keogh plans
Profit-sharing plans
Certain government and military retirement plans

In a Chapter 7 bankruptcy, these funds are typically off-limits to the bankruptcy trustee, provided they remain in the account and have not been withdrawn.

For IRAs, there is a cap on the amount protected in bankruptcy—currently over $1.5 million per person (adjusted periodically for inflation). For most people, this means the entirety of their IRA savings is safe.

Don’t Withdraw Retirement Funds to Pay Debt Before Filing

One of the biggest mistakes we see is people cashing out their retirement accounts to try to pay down debt before filing for bankruptcy. It’s an understandable instinct—you want to avoid bankruptcy, protect your credit score, or stay ahead of your bills. But it can backfire.

Once you take money out of a protected retirement account, it loses its protected status and becomes fair game for creditors. If you use those funds to pay off some debts but not all, and then end up filing for bankruptcy anyway, you may have lost your retirement savings without meaningfully reducing your financial burden.

Before making any withdrawals, speak with a bankruptcy attorney to understand your options and how to protect your long-term interests.

What Happens in Chapter 7 vs. Chapter 13 Bankruptcy

There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Here’s how retirement savings are handled in each:

Chapter 7 Bankruptcy is also known as liquidation bankruptcy. The bankruptcy trustee can sell certain non-exempt assets to repay creditors. Fortunately, as mentioned, most retirement accounts are exempt.
Chapter 13 Bankruptcy involves a 3- to 5-year repayment plan based on your income and debts. Retirement accounts are not subject to liquidation in Chapter 13, but the amount of disposable income you have—including retirement contributions—can impact your monthly payment.

In either case, your existing retirement savings are typically protected. However, if you’re currently making large contributions to a retirement account, the court may look at whether those funds should be redirected toward paying creditors—especially in Chapter 13 cases.

Can Creditors Go After My Pension or Social Security?

Generally, Social Security benefits and most pension payments are protected from creditors in bankruptcy. However, once those funds are deposited into a bank account, they can sometimes become harder to trace and protect.

To safeguard these funds:

Keep them in a separate account if possible.
Avoid commingling protected and unprotected funds.

Your attorney can help you structure your finances in a way that maximizes protection.

When to Talk to a Bankruptcy Attorney

If you’re dealing with unmanageable debt but have retirement savings you want to protect, it’s time to speak with an experienced attorney. Every situation is different. A skilled bankruptcy lawyer can:

Help you decide whether Chapter 7 or Chapter 13 is right for you
Ensure your retirement accounts are protected
Prevent mistakes that could put your savings at risk
Guide you through the entire process with clarity and support

At Lyons & Associates, we understand how hard you’ve worked to prepare for your future. Bankruptcy shouldn’t undo a lifetime of planning. We’ll help you explore your options and build a strategy that protects what matters most.

Let’s Talk About Your Options

Facing bankruptcy doesn’t mean giving up on your retirement. With the right legal guidance, you can get the debt relief you need while keeping your future intact. In addition to bankruptcy services, our team also offers estate planning solutions to help you protect and manage your assets long after your financial recovery.

Contact Lyons & Associates today to schedule a free, confidential consultation. Let’s find a solution that protects your peace of mind—now and in the years ahead.

Category: Bankruptcy