When your divorce was settled, you were ordered to pay child support and/or spousal support (alimony). The amount was based on a number of factors, but partly on your income and assets at the time.
Since then, your income has fluctuated. On top of that, you’ve had some unexpected expenses. Your debts are piling up. You’ve also been having trouble paying the support you owe. You’re afraid you could end up having your wages garnished or even serving time in jail. Can bankruptcy help?
What does the bankruptcy code say?
Under the bankruptcy code, domestic support obligations (DSOs) that arise out of divorce and separation agreements cannot be discharged (eliminated) in bankruptcy.
The idea behind not discharging DSOs is that they’re intended to help former spouses support themselves and their children. Having to go without that would have a much greater impact than a business not getting paid what they’re owed.
DSOs can also include something included in a property division agreement if they’re meant to serve as spousal support. The court would have to look at anything owed to a former spouse under a property division agreement to determine whether it actually qualifies as support. If it doesn’t, it can possibly be discharged.
Bankruptcy can help you better manage your support obligations
While bankruptcy isn’t going to eliminate your support obligations, it can allow you to discharge other debts. This can make it easier to catch up on your overdue payments and prevent legal consequences for failing to make the required payments.
If your financial situation after bankruptcy still makes it difficult to pay the support that’s been ordered, you can try to seek a modification of your support orders. Whether you can do this will depend on a number of factors, including your ex’s own financial situation.
If you’re considering bankruptcy, it’s important to find out what it can and can’t do for you. With sound legal guidance, you can make the best decision for you and your family.