Can I Go Bankrupt To Get Out Of Paying Spousal Support?

The Intersection of Bankruptcy and Spousal Support: A Comprehensive Guide

Deciphering the labyrinth of financial and legal obligations during and after a divorce can be a daunting task. One question that often arises is: “Can I go bankrupt to get out of paying spousal support?“. This article aims to comprehensively answer this question while shedding light on the complexities of spousal support and bankruptcy.

Understanding Spousal Support

Spousal support, also known as alimony, is a legally enforced commitment where one spouse is required to financially assist the other after separation or divorce. The purpose of spousal support is to:

  • Acknowledge any sacrifices made by one spouse during the marriage
  • Share the financial burden of childcare
  • Aid the lower-income spouse in becoming financially independent

Bankruptcy Basics

Bankruptcy is a legal status for individuals or entities that are unable to repay their outstanding debts. The process involves a bankruptcy trustee, who liquidates the debtor’s non-exempt assets to repay the creditors. Once the bankruptcy process is complete, most of the debtor’s remaining debts are discharged, providing them with a fresh financial start.

The Limitations of Bankruptcy

While bankruptcy can provide relief from numerous financial obligations, it has its limitations. Specifically, not all debts are dischargeable under bankruptcy. Examples of non-dischargeable debts include child support, student loans (if it’s less than seven years since the debtor ceased to be a student), court fines, debts arising from fraudulent activity, and crucially for this discussion, spousal support.

Spousal Support and Bankruptcy

The intersection of spousal support and bankruptcy is fraught with financial and legal intricacies. An important point to note is that bankruptcy does not discharge spousal support obligations. This means that even after declaring bankruptcy, the debtor is still required to make all spousal support payments.

Implications of Bankruptcy for the Support-Paying Spouse

For the spouse who is obliged to pay spousal support, declaring bankruptcy can have significant implications:

  1. Continued obligation to pay: Even in bankruptcy, the obligation to pay current spousal support and any arrears continues.
  2. Potential increase in support: In certain cases, if the bankruptcy wipes out the ex-spouse’s financial entitlements other than support, the court may increase the amount of spousal support to compensate.

Implications of Bankruptcy for the Support-Receiving Spouse

Bankruptcy can also impact the spouse receiving the support:

  1. Priority of payment: Spousal support is considered a priority debt in bankruptcy, meaning it gets paid before other unsecured debts.
  2. Claim in bankruptcy: The support receiver can file a claim in the bankruptcy for the support arrears. Doing so can potentially increase the amount they receive.

Spousal Support, Bankruptcy, and Property Equalization

Navigating through spousal support, bankruptcy, and property equalization can be tricky. Bankruptcy can potentially wipe out a spouse’s obligation to make an equalization payment, causing financial distress to the other spouse. In such cases, the court may intervene and rectify the situation by increasing the spousal support amount.

Legal Assistance and Advice

When bankruptcy and spousal support intertwine, it’s vital to seek professional legal advice. A good family law attorney can help you navigate the complexities and ensure your financial interests are protected, whether you’re the one considering bankruptcy or the other spouse.

Conclusion

The question, “Can I go bankrupt to get out of paying spousal support?” is more complex than it may initially appear. While bankruptcy can provide relief from many financial obligations, spousal support is not one of them. The complexities of bankruptcy, spousal support, and property equalization necessitate professional legal advice to navigate the intricacies and protect your financial interests.

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