If you ask most people who have gone through divorce proceedings before, they will tell you that the process can be incredibly expensive. In some cases, a spouse may be so strapped for cash after dissolving their marriage that they need to file for bankruptcy in order to resolve their debt issues.
But if you also talk to someone who has gone through the bankruptcy process, you’ll soon find out that not all debts can be discharged in bankruptcy. This might come as bad news to spouses who are struggling to pay back their debts as well as spousal support after a divorce. So how does bankruptcy affect spousal support payments? Let’s take a look.
According to the American Bar Association, there are several exemptions when it comes to discharging debts in bankruptcy. Two of these exemptions are child support payments and spousal support, also referred to as alimony in some states. The reason you cannot discharge these obligations in bankruptcy is because in most states, such as here in New Jersey, a payer can request modification of an existing court order to account for their change in financial circumstances.
So while you may not be able to discharge a support obligation in bankruptcy, making a request for modification could end in a judge reducing the amount owed or terminating the order altogether, depending on the evidence presented.
Though not all of today’s readers have questions about how bankruptcy will affect family law matters like child support and spousal support orders, today’s post illustrates the many issues that must be considered when going through a divorce. Some issues may be easier to plan for than others, but it’s the more difficult-to-plan-for ones that tend to require the most help from a lawyer.