Can I Avoid Paying Child Support or Alimony If I File for Bankruptcy?
Alimony and Support Claims: Filing for bankruptcy does not suspend or stop the obligation to pay child support or alimony. Whether an obligation imposed by a divorce decree is dischargeable depends on whether it is characterized as support or as a property settlement. In many instances, obligations for property settlement can be discharged in bankruptcy, while obligations for child support and alimony cannot be discharged in bankruptcy. Bankruptcy law, not state law, determines whether an obligation is a support obligation or a property settlement obligation.
In addition to being non-dischargeable, alimony and child support payments receive priority status in bankruptcy proceedings. Support obligations must be satisfied before the bankruptcy trustee can distribute any funds to unsecured creditors. are given priority in payment over other unsecured debts and tax obligations. Bankruptcy laws clearly provide that the right to file bankruptcy will not result in the elimination of a family’s right to receive financial support.
Under bankruptcy laws, all court-ordered payments for the support of a child or former spouse are non-dischargeable and must be paid in full. Obligations for alimony, maintenance, and support of a spouse or child are automatically excepted from discharge in Chapter 7, 11, 12, and 13 cases as long as the debt is owed to a spouse, former spouse, or child of the debtor, for alimony or maintenance in connection with a separation agreement, divorce decree, or other order of a court. Only court-ordered spousal or child support payments are protected by law from being discharged in a bankruptcy. Support payments that are being made without a court order can be terminated in a bankruptcy proceeding. Child support arrearage or college expenses for grown children are also non-dischargeable.
Expenses Considered Support
Life insurance; medical expenses, including out-of-pocket expenses; debts for the birth expenses and necessaries for an out-of-wedlock child; dental bills; mortgage payments; mobile home payments, including taxes and insurance; insurance; day care expenses; and payments for a former spouse’s car and attorney’s fees are usually considered “support” for the spouse or child.