Alimony in Bankruptcy
If you're struggling to make alimony payments, whether because of job loss or other debts, you're probably wondering whether filing for personal bankruptcy might help relieve this debt burden.
Alimony is considered a priority debt in bankruptcy, which means that the bankruptcy court will rarely forgive a person's obligation to pay support to a former spouse. However, if the bankruptcy is due to a significant change in the person's financial status, the family court may be willing to alter the alimony agreement. Bankruptcy may also eliminate other debts and make alimony payments easier to afford.
Every situation is unique. To speak directly to a bankruptcy lawyer about alimony bankruptcy, please fill out this form. You can arrange a free, no-obligation initial consultation with an attorney near you.
Alimony in Chapter 7 Bankruptcy
A Chapter 7 filing is designed to offer filers a complete discharge of some or all of their eligible unsecured debt (that is, their debt that is not connected to any property). Here's how alimony works in Chapter 7 cases:
- Alimony is unsecured: Because a creditor cannot seize any property in exchange for your late alimony payments (unlike a car lender, who could repossess your car), alimony is considered unsecured debt. But...
- Alimony is non-dischargeable: Because alimony, like child support, is designed to sustain a person's standard of living, the bankruptcy court has no power to discharge any past-due alimony payments you owe. That means that filing for Chapter 7 bankruptcy probably will not remove your obligation to pay alimony directly; however...
- Other debts may be discharged: If you have other unsecured debts that can be discharged (including credit card debt, payday loan debts or medical bills), you may find that your finances are rearranged enough to permit you to make alimony payments. Or, you may be able to surrender certain property (like a car) in exchange for ending you obligation on any connected debts.
Alimony in Chapter 13 Bankruptcy
Chapter 13 bankruptcy is very different from Chapter 7: it grants filers a three- to five-year period in which they can catch up on their past-due debts while staying current with debts that come due during that period.
- Alimony can be included in Chapter 13: Your overdue alimony payments may be eligible to be included in your repayment plan, which may permit you to catch up on what you owe over time, and they'll be given priority over most other types of debt.
- Collection actions cease: Thanks to the automatic stay, no creditors can take any collection action on you, typically for the duration of your bankruptcy case. This may help you by giving you the peace of mind you need to focus on debt repayment.
- Elimination of low-priority debts: As with Chapter 7 bankruptcy, Chapter 13 bankruptcy may allow filers to eliminate less-important unsecured debts in order to focus on those considered higher-priority by the court.
Learn More about Alimony & Bankruptcy from a Bankruptcy Lawyer
If your financial situation has changed since the court calculated the alimony you're expected to pay, you may need to speak with a lawyer before you consider filing for bankruptcy.
To learn more about how your finances may benefit from bankruptcy, take advantage of this opportunity to connect with a bankruptcy lawyer in your area.