Not only is divorce painful emotionally, but it’s also painful financially too. It’s a challenge to pay the divorce attorneys while also learning to survive on only one income for possibly the first time in years. As a result, you may also struggle to keep your home, keep your car, put food on the table, and keep up with your spousal maintenance and child support payments. All of this financial strain can certainly lead to crippling debt. You may even find yourself wondering: is alimony dischargeable in bankruptcy? Is child support dischargeable in bankruptcy too?
At Eric Wilson Law LLC, our experienced bankruptcy attorneys have helped countless clients in that situation obtain debt relief. We have extensive experience in handling the overlap of bankruptcy law and family law. In other words, we know how to get you caught up on your alimony and child support arrears through bankruptcy relief. Call our law firm today at 205-349-1280 for a free consultation.
What Are Domestic Support Obligations?
Domestic support obligations are funds owed to a current spouse, a former spouse, a child, or a government entity. According to the bankruptcy code, these obligations are generally created through divorce, separation, a court order, a property settlement, or an administrative determination. Basically, alimony and child support obligations fall into this category.
Are Domestic Support Obligations Considered High Priority Debt?
Yes, bankruptcy law distinguishes alimony and child support obligations as high-priority debts. High priority debts are basically unsecured debts that you must pay before other unsecured debts. Other high priority debts include:
- Sales taxes, payroll taxes, and some income taxes
- Wrongful death or personal injury awards that were caused by drugs or alcohol
- Government benefits that were overpaid
- Criminal fines
Most high-priority debts are nondischargeable in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. You’ll still have to pay these off one way or another, whether that’s after your Chapter 7 case or during your Chapter 13 repayment plan.
Non-Priority Debts
Listed below are unsecured debts that are also considered non-priority debts. As stated previously, you must pay these debts after you pay the high-priority debts.
- Credit card debt
- Medical bills
- Student loans
- Utility bills
- Personal loans
You can certainly wipe out the majority of these debts in Chapter 7 and Chapter 13 bankruptcy. The only type of unsecured debt that you generally can’t discharge through bankruptcy are student loans.
Is Alimony Dischargeable in Bankruptcy?
No, alimony is not dischargeable in Chapter 7 bankruptcy or Chapter 13 bankruptcy. However, filing for bankruptcy may allow you to catch up on your alimony debt so that you can fulfill current payments.
Is Child Support Dischargeable in Bankruptcy?
No, child support is not dischargeable in Chapter 7 bankruptcy or Chapter 13 bankruptcy. However, filing for bankruptcy may allow you to catch up on your child support debt so that you can fulfill current payments.
How Bankruptcy Can Help You With Ongoing Child Support Payments and Alimony Payments
While bankruptcy can’t wipe out alimony or child support debt, it can certainly help you gain control of your finances in general so that you can catch up on your payments.
Automatic Stay
One way that a bankruptcy filing can help with outstanding child support arrears and alimony arrears is through the automatic stay. An automatic stay is an automatic injunction that stops most creditors from harassing you about your debts once you file for bankruptcy.
This injunction doesn’t prevent creditors from contacting you about missed child support payments or alimony payments. However, the fact that most of your unsecured creditors can’t pursue further collection efforts should allow you to begin paying child support and alimony again.
Chapter 7 Bankruptcy
If you have alimony or child support arrears when you file for Chapter 7 bankruptcy, here’s how things will go. The money your bankruptcy trustee receives from selling your non-exempt assets will go towards your alimony and child support debt first. Then the trustee will pay off the rest of your unsecured debts. You’ll still have to keep up with current payments during your bankruptcy case as well.
Once bankruptcy takes care of your alimony and child support arrears, you’ll have to keep up with current payments and any leftover debt. If not, you’ll find yourself in the same situation all over again.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy can also help you catch up on your missed payments. Instead of selling assets though, your bankruptcy attorney will just combine your alimony and child support debt into your monthly payments as part of your Chapter 13 repayment plan. In order to receive a discharge at the end of your repayment plan, you must prove to the bankruptcy court that you’re all caught up on your domestic support debts.
A Chapter 13 bankruptcy petition may provide more protection than Chapter 7 when it comes to your alimony or child support obligation. For example, your bankruptcy estate will include all personal earnings. This means that in Chapter 13 bankruptcy, creditors must receive permission from the bankruptcy court in order to collect child or spousal support from your post-bankruptcy earnings.
Do I Have to Keep Paying Child Support and Alimony After My Bankruptcy Case?
Yes. After you receive substantial debt relief from your bankruptcy case, you still have to keep up with both alimony and child support payments. Additionally, if you still have some domestic support debt leftover (from Chapter 7, for example), you’ll have to keep paying that back too. When bankruptcy discharges the majority of your debt, you should be able to handle these financial obligations better.
Call an Experienced Bankruptcy Lawyer at Eric Wilson Law Today
If you’re drowning in debt, including alimony and child support debt, you need Eric Wilson Law LLC to help you get a fresh start. The legal services that our law firm provides have helped thousands of Alabama clients to regain control over their finances. Our Alabama bankruptcy lawyers understand exactly how family law and bankruptcy law intertwine. So we can help you catch up on alimony and child support arrears while you discharge the rest of your debt through bankruptcy. If you’re ready to begin an attorney-client relationship with us, call 205-349-1280. We offer a free consultation to all of our new clients.