Can My Spouse File for Bankruptcy to Avoid Paying Child Support or Maintenance?

Posted by on August 30, 2017 in Blog | Comments Off on Can My Spouse File for Bankruptcy to Avoid Paying Child Support or Maintenance?

For individuals overwhelmed by debt and unable to meet their financial obligations, filing a bankruptcy petition can be an effective way to restructure those debts and even get some of those obligations discharged forever.

What bankruptcy will not do is get someone out of having to pay any court-ordered child support or spousal maintenance. These domestic support payments are treated differently than other debts in both Chapter 7 and Chapter 13 bankruptcy proceedings, and anyone thinking that bankruptcy will be their ticket out of having to make such payments will quickly discover that they might be mistaken. There are two different main types of consumer bankruptcies: Chapter 7 and Chapter 13, and they treat debts from a divorce very differently.

Chapter 7 Bankruptcy

In a petition filed under Chapter 7 of the bankruptcy code, a trustee is appointed who effectively takes control of most of the debtor’s assets and uses them to pay off creditors. Once those debtors have been paid to the extent possible using those assets, these debts can be “discharged,” meaning that the debtor will be relieved of any further obligations to repay them.

Some debts, however, are not dischargeable. These includes any debt related to a divorce, including but not limited to, child support, alimony or the requirement to pay a debt from a divorce, such as a joint credit card or a joint tax debt. Any and all debts related to a divorce are not subject to the provisions and discharge associated with a Chapter 7 filing, so you will still owe those debts.

However, the rules are different in a Chapter 13 filing.

Chapter 13 Bankruptcy

While Chapter 13 bankruptcy cases work differently than Chapter 7 cases, one thing they have in common is the fact that domestic support obligations are not dischargeable. But are all debts associated with a divorce a domestic support obligation? The U.S. Code has two sections that discuss debts from a divorce, 11 USC 523 (a)(5), domestic support obligations, and 11 USC 523 (a)(15), debts incident to a divorce.

At this point, you may be wondering what exactly is a domestic support obligation and what is a debt incident to a divorce? That is a question that can only be answered depending on your specific case, but there are a few general guidelines. First, child support and alimony are always domestic support obligations and are never dischargeable. Same with attorneys’ fees that were awarded to someone in obtaining the child support and/or alimony.

But what about a credit card that a person was ordered or agreed to pay? If the payment was “in lieu of alimony” then it might be considered a domestic support obligation; a lot depends on how the court order is phrased, but there is no magic bullet to make an obligation a domestic support obligation.

The lawyers at North Metro Litigators are very familiar with the intricacies associated with the differences between a domestic support obligation and a debt incident to a divorce, and can advise you accordingly.

North Metro Litigators: Alpharetta Child Support Attorneys and Bankruptcy Lawyers

At North Metro Litigators, we understand how crucial child support and spousal maintenance payments can be to a parent and their children as they try to build a new life following a divorce. When those obligations aren’t met, we can help. Our experienced and committed Alpharetta child support attorneys will take all necessary steps to get you the resources to which you are entitled – in the family court as well as in bankruptcy court. Call us today at (678) 944-0000 or contact us to arrange for your free initial consultation.