Bankruptcy, Alimony and Child Support Payments

Given the current state of the economy, it is not surprising that more and more Americans are filing for bankruptcy. While bankruptcy can provide a fresh financial start for many people, it does not discharge all of their preexisting obligations, including student loans, back taxes, and – most importantly – alimony and child support payments.

In fact, under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, alimony and child support must be paid first, before any other creditor.

While this is always true no matter the circumstances, it may still be wise to consider filing a “nondischargeability complaint” if you are divorced. This can help guarantee the protection and enforcement of your alimony and child support rights.

If your former spouse does initiate bankruptcy proceedings, you should receive notice from the bankruptcy trustee on two separate occasions: at the time of filing and at the time of discharge. (The state child support enforcement agency should also receive notice.)

If your former spouse has sufficient assets and these assets are liquidated, then he or she will more than likely be in a better position to cover past due alimony/child support payments. Liquidation may also enable them to resolve enough outstanding debts so that it becomes that much easier to make future alimony/child support payments.

However, if your spouse has insufficient assets, the bankruptcy court will probably order catch-up payments. In these situations, car accident lawyers Austin Bradford and Michael Stout say it may be beneficial to retain the services of a lawyer to negotiate payment terms on your behalf. The same can be said if your former spouse goes to court (post-bankruptcy) seeking alimony/child support modification.