Child Support and Alimony
Child support and alimony fall within the legal category of a Court ordered "domestic support obligation." This is because an obligation to pay child support or alimony is created by a Court order requiring a spouse to pay a certain sum of money each month to the other spouse, for the benefit of the other spouse, the children, or both the spouse and the children. A Court ordered "obligation" requiring you to pay for the support of your child is called "child support" and a court ordered obligation to pay money for the support of your spouse is called "alimony" or "spousal "support." The obligation arises by virtue of a judgment or order of a divorce court or family court that orders you to make certain monthly payments. A domestic support obligation can also arise by voluntary agreement between to spouses, pursuant to a marital settlement agreement, which is then embodied in a Court ordered by reference to the marital settlement agreement.
How Child Support and Alimony Is Treated In Bankruptcy
Domestic support obligations typically are not eliminated in bankruptcy. The bankruptcy code specifically exempts such debts from being eliminated by discharge. The reason for preventing the discharge of child support and alimony obligations in bankruptcy is based on a social policy that repayment of such obligations is more important than a bankrupt's ability to obtain a fresh financial start. The law is based on the belief that protecting the welfare and well being of children and spouses who are dependent upon another person's income for their well being, is more important than allowing a bankrupt person to wipe out all of their debt and start with a clean slate.
Child support is a type of Court ordered domestic support obligation. An obligation to pay for the support of a child cannot be discharged. When you file bankruptcy, you must continue to pay Court ordered payments owed to your spouse. Any missed, past due payments remain a debt that you will still have to pay after you file your bankruptcy and obtain a discharge.
Alimony and Spousal Support
Similar to child support, alimony and spousal support are a type of Court ordered domestic support obligation that cannot be discharged with a bankruptcy filing. You must continue to make your Court ordered payments and you will still be responsible for repaying any missed, past due payments.
Repayment in Chapter 13
If you are behind on your support payments, whether for the benefit of your child, or alimony or spousal support, you can repay your missed payments in a Chapter 13 case, by filing a repayment plan that repays your missed payments over a 3-5 year period. Keep in mind that support payments are entitled to priority. You should discuss this with your lawyer the implications of priority status of a debt and what that means as far as your repayment plan is concerned.
Repayment On Your Own Terms
Even if your wages have been garnished, by filing bankruptcy you can stop a wage garnishment and repay your child support or alimony payments under your own terms proposed in your Chapter 13 repayment plan. If your plan is approved, then you can repay your missed payments on your own terms.
Disclosure to Trustee
During your initial meeting with the bankruptcy trustee, you and your lawyer will have to disclose to the trustee the name and address of your ex-spouse to whom you owe the alimony or child support payments. The trustee will want to make sure that your ex-spouse is receiving payments.