The Impact of Bankruptcy on Alimony and Child Support

One common area of concern for individuals filing bankruptcy is that of child support and alimony obligations. This includes for people who owe child support and alimony, as well as those who receive child support or alimony. Here, this guide will explain the impact of bankruptcy on these legal and financial obligations.

These types of payments are considered a priority debt during bankruptcy proceedings. That means that you cannot discharge this debt, and you will need to get caught up on missed payments as well.

However, with a chapter 13 reorganization plan, you will see relief with your overall financial picture, how much you owe, to whom and when, with a payment plan. This payment plan will make it easier to get caught up on the support you still owe. The same goes for filing chapter 7 – you cannot discharge child support, but by eliminating other financial obligations, you should have an easier road to pay your child support moving ahead.

On the other side of things, many people who receive child support are concerned that if they file bankruptcy, they will not be able to protect those payments, which would of course be a major negative to going through with the bankruptcy proceedings. However, if you are receiving child support payments and are filing bankruptcy, the ongoing payments you receive will be protected during the proceedings. Further, if you have leftover money which was provided from child support payments, this can generally be protected as an exempt asset as well.

Moving onto alimony, this is also considered a domestic support obligation, just as support payments also are. Therefore, the same rules generally apply although there are certain exceptions. Typically, if you file bankruptcy and owe alimony, you cannot discharge this debt and must get caught up on missed payments or past obligations, and if you file bankruptcy and are receiving alimony, you should be able to protect this income as well.

Of course, child support and alimony are only one set of concerns for those filing bankruptcy. Further, each person’s case is always different, with a range of circumstances and factors affecting how bankruptcy proceedings play out, what the best options are, what type of bankruptcy to file, and whether you should even file bankruptcy or not.

Always consult with an experienced attorney who can guide you through this complex process. Having legal assistance to fight on your behalf and ensure you take advantage of every opportunity to successfully improve your own circumstances is crucial.