• 22
  • June
    2010

Given the current state of the economy, it's not surprising that more and more people are considering filing for bankruptcy. After all, bankruptcy can provide a much-needed fresh financial start in the aftermath of a serious accident, protracted illness, loss of a job or divorce. However, when it comes to bankruptcy and divorce, the person filing for bankruptcy cannot use it as a means to escape their court-ordered responsibilities such as spousal support and child support.

Both spousal support and child support payments cannot be discharged via the bankruptcy process. In fact, under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), past due spousal support and child support payments must be paid before any other debts, including back taxes.

Are there any steps I can take to protect myself?

Despite the legal protection of the BAPCPA, you should strongly consider filing a "nondischargeability complaint" if your former spouse is filing for bankruptcy. This extra step can help protect your interests in receiving spousal support and child support payments.

In addition, if your former spouse is filing for bankruptcy, be aware that the bankruptcy trustee is legally obligated to alert you (and the child support enforcement agency) on two separate occasions: 1.) at the time your former spouse files and 2.) at the time of the discharge.

Am I out of options if my former spouse has few assets to liquidate?

If your former spouse has relatively few assets to liquidate, you are not out of options. The trustee will more than likely create a schedule of catch-up payments and future payments. However, it may be beneficial to have your own legal counsel present at the bankruptcy hearings in order to negotiate an acceptable payment schedule and advocate for your best interests.

Please note, your former spouse must petition the local court for any modification of spousal support and/or child support payments post-bankruptcy. In general, he or she will have to demonstrate a substantial change in circumstances or financial hardship.

If my former spouse has significant assets to liquidate, what can I expect?

If your former spouse has significant assets to liquidate, it should work to your advantage. You will most likely receive past due spousal support and/or child support payments. In addition, since many of your former spouse's debts will be settled, he or she should be on more firm financial footing post-bankruptcy and therefore in a better position to make future spousal support and/or child support payments.

Related Resources:
  
• Bankruptcy Doesn't Absolve Spousal Support Payments (CreditCards.com)