Bankruptcy and divorce are very common yet unfortunate events especially during this recession. Although common, very specific and important implications occur when bankruptcy and divorce occur at the same time.  The law states that a bankrupt either the bankruptcy proceeding is resolved, an exception to the stay applies, or the bankruptcy court authorizes the divorce proceeding to continue while the bankruptcy is pending. Serious financial sanctions to the parties, lawyers and state court judges can be imposed by the federal judge if the rules are not followed. Therefore, if a bankruptcy is commenced or is contemplated at the same time a divorce action is pending, it is critical that bankruptcy and divorce counsel are consulted.