Alimony is spousal support after a marriage has ended in divorce. The purpose of alimony is for one former spouse to support the other. The support is typically monetary.
Alimony is often arranged or ordered when a marriage involved one partner making income while the other partner took care of the home. "Stay at home" partners are often recipients of alimony.
Yes. Filing for bankruptcy places an automatic stay on collection actions. This means that creditors cannot collect or attempt to collect debts from the debtor while bankruptcy proceedings are occurring. This includes lawsuits and other legal actions.
A supported spouse will be pleased to find out that alimony payments are generally not affected or dischargeable through bankruptcy. Section 523(a)(5) of the Bankruptcy Code provides that spousal support is non-dischargeable debt.
Under bankruptcy law, only "domestic support" is non-dischargeable. Payments which are connected to domestic support, but not part of spousal support, can be discharged. For example, in one case the alimony agreement required that a late fee payment be made if the supporting spouse was late on alimony payment. The bankruptcy court ruled that the late fees were designed to encourage the payment of alimony, but the fee was not alimony itself.
Alimony payments can be changed during bankruptcy in two cases:
Bankruptcy can affect the ability of the supporting spouse to pay alimony, which is a major factor used to determine support payments to begin with. The supported spouse needs to find out whether the supporting spouse can live a modest lifestyle within his or her budget while paying domestic support. If the supporting spouse cannot, payments may be reduced.
A supported spouse can enter the supporting spouse’s bankruptcy case as a creditor. A spouse can be a creditor in one of three ways:
After the supported spouse has been registered by the court as a creditor, the supported spouse will be invited to a creditor’s meeting. A creditor’s meeting is where the bankruptcy trustee meets with creditors to discuss payment terms. Creditors should have proof of identification and their social security number before attending.
Be aware that there are different kinds of bankruptcy. Although these steps are common for all chapters of bankruptcy, the supported spouse should be aware of which type of bankruptcy the supporting spouse is filing and act accordingly.
If you or your former spouse is planning to file for bankruptcy, you should consider consulting a bankruptcy lawyer. Consulting with an experienced bankrputcy lawyer will help you understand your rights and help you deal with the complicated court system.
Last Modified: 08-21-2013 10:19 AM PDTLaw Library Disclaimer
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