When you and your spouse divorce, it can drastically change your finances, especially if you are responsible for paying child support or alimony to your ex-spouse. Unfortunately, if you experience financial difficulties, whether it be job loss or unforeseen medical expenses, this can make it incredibly difficult to make ends meet, leaving you considering filing for bankruptcy. However, you may worry about the impact it will have on the current child support or alimony arrangements. As such, the following blog explores what you should know about these matters, including the importance of working with a Memphis, TN consumer bankruptcy lawyer to assist you through these matters.
Will the Automatic Stay Prevent My Ex From Collecting Support?
Generally, when you declare bankruptcy, you will be granted what’s known as an automatic stay. This is essentially a process in which creditors are prohibited from continuing collection efforts against you. The primary purpose of the automatic stay is to grant you relief from matters like lawsuits, phone calls, and wage garnishments, while ensuring that all creditors are on even ground when it comes to collection.
However, some creditors and debts are exempt from the automatic stay, including domestic support obligations like child support or alimony. As such, you are still responsible for making these payments during the course of your bankruptcy case.
Will Bankruptcy Eliminate Child Support or Alimony Obligations?
In the event you decide to file for bankruptcy, it’s incredibly important to understand what you can expect to happen to the debts in your name. Generally, when you file Chapter 7, debts will be paid through the liquidation of your assets, with eligible remaining debts discharged at the end of your case. Chapter 13, on the other hand, reorganizes debts over a three to five-year repayment period, while eligible debts are discharged following the completion of your payment plan.
However, certain priority debts, like domestic support orders, cannot be discharged during bankruptcy. In fact, because the courts generally prioritize these debts above all others, these will typically be paid in full before other creditors recover payment.
What Steps Should I Take Before Filing if I Make Support Payments?
Before filing for bankruptcy, it’s important to take the necessary steps to prepare yourself and your documents to make this process as smooth as possible. Generally, the most important thing you can do is gather all information related to your domestic support obligations, like your divorce agreement, proof of payments, and any information related to arrears for missed payments, if you have fallen behind.
Filing for bankruptcy can be an overwhelming and difficult process, which is why it’s in your best interest to connect with an experienced attorney with the Arnold Law Firm. Our team understands how stressful debt can be when you are responsible for making support payments, which is why we can help you reap the full benefits of this process. Contact us today to learn how we can fight for you.
