Child Support, Alimony & Bankruptcy……Will Filing Chapter 7 or 13 Have an Effect?
When you are in the process of settling your divorce, or if you have had to win a divorce judgment in court
the manner in which the settlement or judgment “reads” may have serious consequences. After a rough divorce it is not uncommon for a bankruptcy to follow. Many times the person obligated to pay the support is behind in payments, or the recipient who is not getting support cannot pay the bills and wants to file a bankruptcy. What happens to money you owe or are owed if you file a Chapter 7 or 13 bankruptcy?
Domestic support obligations such as child support payments and alimony as well as certain property settlement obligations are not dischargeable in Chapter 7 bankruptcy, however, property settlement “debts” are dischargeable in Chapter 13 bankruptcy. Settlement agreement language can help determine how a judgment or property settlement will be viewed by a bankruptcy court. Settlement agreements should include a provision contemplating potential bankruptcy by either party.
Property settlement agreement language should clarify to a bankruptcy court the parties’ intentions and provide the court with a basis for interpreting the settlement for debt dischargeability purposes. Child support and alimony are typically not dischargeable in bankruptcy proceedings, however, if a support obligation has been reduced to a judgment, it may change the nature of the collectability of the debt.
If you find yourself in such a position it is best to consult an attorney with substantial experience. There are so many different circumstances that a proper answer to your particular problem can only be obtained by a trained and experienced lawyer.
If you have any question regarding this or any other legal matter our firm may be able to help you. Please contact Jupiter Legal Advocates at (561) 748-8000 or email us at [email protected] for further information and assistance. We try our very best to respond immediately.
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