Will Bankruptcy Help With Divorce Obligations?
Sometimes, a divorce can trigger a financial crisis for one or both parties involved. Adding divorce-related financial obligations like alimony or child support can cause significant problems, which may even lead to bankruptcy. It is perhaps natural to wonder if filing for bankruptcy will eliminate any of these obligations.
The U.S. Bankruptcy Code allows individual debtors to file under either Chapter 7 or Chapter 13 protection, depending on their income level and the nature of their debts. Regardless of which chapter you file under, however, the Code is clear: support obligations are not dischargeable in bankruptcy. Support obligations, by the Code’s definition, include nearly every expense associated with them: alimony, child support and attorney fees, connected with alimony and child support.
The rationale behind this is simple: it would be utterly against public policy for a spouse to avoid support obligations. The rights of each spouse, and of any children, must be protected at all times. Bankruptcy can help a spouse who is behind in his/her support obligations.
Debts and Other Property
While no support obligation is dischargeable, the law differs between types of bankruptcy with respect to debts and divisible marital property. For example, it is not unheard of to owe money or debts under a property settlement that does not qualify as support – under Chapter 7 they are not dischargeable, but they may be under Chapter 13. If the debt does not qualify as “domestic support” (for example, repairs to the marital home), then it may be dischargeable.
If marital debt exists during a divorce, and you or your spouse files for bankruptcy under Chapter 7, that debt will not be dischargeable. Under Chapter 13, which is structured differently, your spouse may be able to have a non-support obligation wiped out. This is something you want to discuss with a bankruptcy attorney. A spouse who owes these obligations may benefit from filing a Chapter 13, but there are defenses to the discharge of certain of these obligations.
Contact An Orlando Bankruptcy Attorney
If you or a former spouse are considering bankruptcy after a divorce, you need an attorney who understands how both these processes work. The Orlando divorce and bankruptcy lawyers at the firm of Goodblatt · Leo have been handling these types of cases for years, and understand how to best analyze your situation either to write-off an obligation or how to keep it from being written off. Contact us today on our website, agoodblatt.com, or call us at 407-228-7007 to book an appointment.