How Will Bankruptcy Affect Child Support and Alimony?
When people get divorced they often give little thought to what will happen if they, or their ex, file for bankruptcy in the future. Spouses in a divorce may take the position that they could care less if the other spouse filed for bankruptcy. Alternatively, a spouse may think that bankruptcy will save them from seemingly difficult alimony or child support obligations. Both positions are incorrect.
Chapter 7 and Modifications
Although Chapter 7 bankruptcy can discharge most of your debts and obligations, it will not discharge or excuse a child support or alimony obligation. It will also not discharge any back owed but unpaid support, or any support even related to the child that’s not technically child support (for example, the obligation to pay a child’s medical or school expenses).
However, if your financial situation has significantly changed since your divorce, and you are seeking a modification of the amount of support that you have to pay, bankruptcy may help convince a judge (and possibly your ex spouse) that you really and truly are struggling financially.
The only issue that may complicate things in a divorce case is with respect to marital property. In some cases, you may need to ask a bankruptcy court for permission to have the family law court make determinations as to property, bank accounts, or anything of value that is at issue in your divorce.
Certainly, bankruptcy shouldn’t be used as a tool to convince a family court judge to lower your payment obligations, and you should speak with a bankruptcy attorney before filing.
The Automatic Stay
Bankruptcy court also has an “automatic stay,” which prevents creditors or courts from taking any property owned by the debtor (the one filing for bankruptcy). However, that stay does not apply to family law cases, and courts can continue making timesharing, alimony, or child support determinations even while the bankruptcy is going on.
The automatic stay also will not stop any payments you are ordered to make as temporary support, if your divorce is still going on.
Some Alimony Can be Discharged
Alimony can be of concern to support recipients because the bankruptcy code prohibits the discharge of alimony that is supportive. However, not all alimony is supportive. For example, some alimony is rehabilitative—intended to provide the receiving spouse more education or training so he or she can get back on their feet.
There are some cases that say that even though support may be labeled as alimony, if the alimony is not specifically for support, it can be discharged. This is why it is important to include the language necessary in any marital settlement agreement to make sure that your alimony payments are protected from the other spouse’s bankruptcy.
Our Tampa child support attorneys at the Pawlowski//Mastrilli Law Group can help you fight for alimony or child support, or fight against a support order that you are having trouble paying. Contact us today for more information.