Bankruptcy in and of itself can be tricky business on its own, but adding alimony into the mix can make it even more difficult. Take a look at how spousal support can be affected by bankruptcy and how it may or may not be discharged by bankruptcy.
The General Rule
The general rule regarding spousal support and bankruptcy is that “domestic support obligations” are not dischargeable.
“Domestic support obligations” are any debts owed to or recoverable by a:
Child of Debtor
Child’s parent or legal guardian
Government unit (alimony, maintenance, child support)
With none of these debts being dischargeable, it may be an unwise decision to file for bankruptcy if you want to avoid paying them.
The Exceptions To The Rule
There are not many instances in which these types of support can be discharged; however, there are two main ways in which it can occur.
The first example occurs when a divorce decree specifies that an obligation to a spouse is alimony when it is not actually alimony. As an example, there may be a divorce decree stating that the husband is to pay a martial debt to some form of business. If the husband’s payment is to be treated as “alimony,” he may be able to discharge that “non-alimony” debt.
The second instance occurs when the ex-spouse is able to discharge an alimony obligation if it has been assigned to a third party. For example, when a couple files for divorce, one party may be ordered to pay alimony.
Let’s say the husband is ordered to pay his former wife $500 per month. If he does not pay that amount, his former wife has the ability to give the right to collect to her father. Her father now has the right to collect from her ex-husband, who can discharge the alimony assigned to his former father-in-law.
Contact Our New York Bankruptcy Attorneys Today!
Attempting to discharge alimony through bankruptcy can be difficult and stressful on your own. Our goal is to use a compassionate and personalized approach to make the complexities of filing for bankruptcy as easy as possible.If you have questions regarding your alimony payments, contact us today through our website or give us a call at (917) 909-6166!