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Effects of Bankruptcy on Alimony Payment

When you are filing for bankruptcy, your financial stability will completely change. You are filing in the first place because you are not on solid footings. Hence, your creditors will be contacted, payment plans will be made, and a list of dischargeable debts will get eliminated. But how about spousal support? Will you still have to pay the alimony to your spouse when you file for bankruptcy? Read to know what our Pittsburgh bankruptcy lawyer has to say.

What is Alimony?

Alimony is the money that you pay for the spousal support to your ex-spouse after your divorce. Often the alimony gets determined in the prenup that many couples sign before they get married. In Pennsylvania, the ex-spouse is not naturally entitled to spousal support. It is either negotiated or granted by the court.

Alimony as Non-Dischargeable Debt

When you want to eliminate your debts and have a clean slate, filing for bankruptcy will be your best option. It will effectively eliminate your dischargeable debts. Whether you are filing for Chapter 7 or 13, will determine if your dischargeable debts will be eliminated or not. For example, utility bills or medical bills can be partially or totally eliminated depending on the chapter you are filing for. However, there are certain debts that cannot be discharged or eliminated and alimony is included in that.

If you were looking for freedom from the financial obligation of paying alimony, then this is certainly not good news. Talk to our Pittsburgh bankruptcy lawyer to find out a way to deal with this.

Alimony as Dischargeable Debt in Bankruptcy

According to Section 523 of the U. S. Bankruptcy Code, the debtor must pay for spousal support even after filing for bankruptcy. However, there can be a few exceptions.

Third-Party Involvement

To get the alimony to become dischargeable debt, a third party needs to get involved in the case. For example, if your ex-spouse signs over to their parents to collect the alimony and then send it to them, then it can become a dischargeable debt or be eliminated from your filing.

Incorrect Alimony Classification

When you are getting divorced, there are several documents you have to sign. One of the most important documents is the divorce decree. This document is vital as it covers the subjects of child custody, division of property, and alimony. This document can be classified incorrectly.

For example, the document may classify that the ex-spouse makes a payment to a company with you which is considered as alimony money. If that is there, then you don’t have to pay for another “alimony” or the actual domestic support. Hence, the alimony can become a dischargeable debt for you.

Consulting an experienced Pittsburgh bankruptcy lawyer will help you get a more elaborate idea about what these exceptions can be and how you can use them to get rid of the financial obligations. If you are looking for a lawyer, then come to Pittsburgh Bankruptcy Law Group. Get a free consultation from us whole filing for bankruptcy.

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