Bankruptcy and Alimony

Going through a divorce can be extremely stressful: aside from the obvious emotional stress, there are often a number of financial decisions to make as well. Aside from dividing your possessions, you may have to deal with joint bank accounts and shared debts such as mortgages. All of this has the potential to negatively impact your financial wellbeing. If you are thinking of filing for bankruptcy, issues of alimony and child support deserve particular attention.

One common component of divorce settlements is alimony payments: money given to one spouse by the other as support. It’s very important to distinguish between alimony and child support. Child support is likelier to be court-mandated. Unlike alimony, child support does not count as taxable income.

The law views child support as money given to support a child’s upbringing, rather than to aid a spouse. As a result, missed child support payments are much more severe under the law. Missed alimony payments can only be turned over to a collection agency; the legal system will probably not be directly involved.

When filing for bankruptcy, this distinction becomes very important. Bankruptcy protection can relieve many of your debts, and many people in severe debt find bankruptcy gives them a fresh start. One debt bankruptcy does not alleviate, however, is child support. Even if bankruptcy turns every other aspect of your financial wellbeing around, earlier and continuing child support payments will remain your responsibility.

If you are considering filing for bankruptcy, it’s important to gather as much information as you can on your finances. Financial information from your divorce may be relevant to the filing process. Should you be required to pay child support or alimony, try to get information about any particular legal requirements from your divorce and make note of your payments.

Contact Us

Both divorces and bankruptcy proceedings can be difficult. But with the help of a knowledgeable and understanding bankruptcy lawyer, you can make the process easier and achieve greater long-term stability. For more information on filing for bankruptcy and the possible effects of your alimony or child support payments, contact the experienced West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, PA today at 561-353-2800.