One of the biggest concerns that people have when considering bankruptcy is the effect on their financial obligations, including spousal support or alimony. Many people wonder whether filing for bankruptcy will discharge their obligation to pay alimony or if they will still be required to pay it.
Is alimony dischargeable in bankruptcy?
First and foremost, it is important to understand that bankruptcy protects individuals who are struggling with overwhelming debts. There are two primary types of bankruptcy filings for individuals, Chapter 7 and Chapter 13. Each type of bankruptcy handles alimony differently.
In a Chapter 7 bankruptcy, alimony is a priority debt. This means that it cannot be discharged. The court requires you to pay priority debts first with any available funds.
In a Chapter 13 bankruptcy, alimony can be a secured or unsecured debt, depending on the circumstances of the case. If the alimony is considered a secured debt, you must pay it ahead of other unsecured debts.
Creditors may label certain debts as non-dischargeable, meaning they can’t be eliminated through bankruptcy. In most cases, non-dischargeable debt falls under one of several categories:
- Taxes, including most income tax debts
- Certain types of loans, including government-backed student loans
- Court judgments on unpaid loans
- Debts related to criminal fines or restitution
- Debts related to family court matters (alimony falls into this category)
- Debts incurred through fraud or malicious behavior
If a debtor took out a loan with no intentions of repaying, they could not have this debt discharged. Similarly, creditors can object to a bankruptcy discharge if they can prove the debtor committed fraud, including lying about their income or assets to obtain credit or loans.
Are Your Debts Dischargeable?
Understanding non-dischargeable debt in bankruptcy is crucial in navigating the complex system. Even though bankruptcy is there to help you manage your debts and get back on track, it may not eliminate all of them.
It’s essential to distinguish between different types of debts and speak with an experienced bankruptcy attorney, who can advise you on how they’ll survive the bankruptcy process. By doing so, you’ll be able to determine whether bankruptcy is the right choice for you and what debts you need to focus on paying off. Remember, the right information and advice can make a significant difference in your financial future.
It is important to note that the court will consider several factors when determining if alimony can fall under bankruptcy protection. These issues include:
- Amount of alimony owed
- Length of time you’ve paid
- Reason for filing bankruptcy
- Whether you incurred alimony
In addition, if you are considering filing for bankruptcy, it is important to notify your ex-spouse or their attorney of your intent to file. This allows them to file a claim with the court and make their case for why the court should not discharge the alimony debt.
While alimony is generally not dischargeable in bankruptcy, there are some cases where it may be. To determine whether alimony is dischargeable in your particular case consult with an experienced bankruptcy attorney. By working with an attorney, you can better understand your options. This way, you’ll make an informed decision about the best course of action to take. Remember, bankruptcy is a tool to help you get back on your feet financially, and an experienced attorney can help you make the most of it.