Many people file for bankruptcy when they find themselves in over their heads when it comes to debt. While the process can help discharge a great many debts, including credit card debt and medical payments, things like alimony or child support are not usually able to be discharged. The Balance explains how these debts are treated when a person files for bankruptcy.
Alimony is payments made by one spouse to his or her ex after a divorce. They’re intended to help the spouse receiving payments maintain the same standard of living that was present during the marriage. As a result, courts consider alimony payments non-dischargeable in the majority of cases. However, divorce proceedings are not always cut and dry. That’s why divorce courts look at a few different factors when determining whether a debt can be discharged.
First, to be considered alimony the debt must be paid to an ex-spouse. Next, the debt must be labeled as alimony or spousal support within the divorce decree. Some types of alimony may be referred to differently, or it may be provided via another means. For instance, property settlement decisions may be made in the interest of providing the other spouse support. In this case, payments won’t be explicitly labeled as alimony or spousal support. The bankruptcy court would consider these factors when making a decision on whether alimony could be discharged.
While it’s true that in most instances the answer would be no, it’s still possible to get a handle on your finances via bankruptcy. For instance, other debts will be discharged, which leaves more money for paying things like alimony or spousal support, which are considered priority debts. Additionally, filing for Chapter 13 allows you to better manage your debt, even if it won’t be forgiven. As an example, you may be afforded up to five years to pay off back alimony or child support under Chapter 13.