It is no secret that many financial issues end up paving the way for divorce. Just as common, if not more so, are the financial difficulties people face after divorce. Going from a two-income to a one-income household, having to sustain costs of living on your own, and adjusting to all of this can be very difficult. Spouses who have been ordered to pay alimony, or spousal support, may also find these payments difficult to include in making a manageable budget. If your former spouse has been ordered to pay you alimony, but is having financial difficulties and on the brink of bankruptcy, you may be wondering how bankruptcy will impact the alimony obligations.
If My Former Spouse Files for Bankruptcy, Will I Still Get Alimony?
Whether the financial difficulties started before, after, or during divorce, divorce often plays a significant factor in a person filing for bankruptcy. If you are finding it difficult to keep your head above the minimum payments on your outstanding debt obligations, bankruptcy offers much needed relief from things like consumer debt. The impact of bankruptcy on divorce and alimony will greatly depend on the stage of the divorce.
If the divorce is pending and has not yet been finalized, an automatic stay will be put in place by the bankruptcy court as soon as a spouse files. This can bring divorce proceedings to a screeching halt. The automatic stay prevents any creditor from pursuing collection actions, such as wage garnishment, that would go towards paying your debts. With the automatic stay in place, you would need to obtain a court order temporarily lifting the stay in order to proceed in the resolution of matters related to divorce. There are many financial issues incident to divorce, such as child support or alimony, that may not be permitted to be resolved while the bankruptcy stay is in place. Furthermore, you should be aware that marital property subject to division cannot be divided if it is to be included in the bankruptcy estate.
Should your divorce already be finalized and your former spouse files for bankruptcy, it is important for you to know that back child support and alimony obligations are considered to be non-dischargeable debts. Even in the event that your former spouse files for bankruptcy, he or she will remain liable for paying back alimony even after bankruptcy discharge. On the other hand, bankruptcy can be used to make such outstanding debt obligations and continued alimony payment obligations more manageable. Through addressing non-dischargeable debt in bankruptcy, you will likely have more resources available to stay current on outstanding payment obligations.
While filing for bankruptcy may not change alimony payments or discharge responsibility for paying back alimony, there are factors that could contribute to the need to file bankruptcy that could mean a modification of the alimony award. The payor spouse would, however, need to file a motion to modify maintenance with the court. A hearing on whether spousal support should be modified will be held and the court will review relevant factors to see if the payor spouse has experienced any significant life changes that would merit a modification of the original alimony award. Losing a job or experiencing other financial challenges may be found as a valid reason for modifying an alimony award.
Family Law Attorneys
Are you having trouble with your former spouse not making court-ordered alimony payments? Are you having trouble making court-ordered alimony payments? Navarrete & Schwartz can help. We are proud to serve the residents of Midland, Texas. Contact us today.