If you receive spousal support, it’s likely a significant part of your monthly budget. When spousal support is awarded in Alabama, it’s generally because one spouse either earns much less than their partner or one spouse gave up a career to take care of the home. Either way, the law believes that they should continue to receive financial support for a set period of time after divorce.
But what happens if the paying spouse tries to opt out by declaring bankruptcy? Find out what will happen to your alimony payments, and if you’re facing family law issues, call Coumanis & York at 251-336-3121.
Dischargeable and Non-Dischargeable Debts
In bankruptcy, debts are divided into two categories: dischargeable and non-dischargeable. Those in the first category are eliminated through bankruptcy, while those in the second category survive bankruptcy and must still be paid.
Dischargeable debts include credit cards, medical bills, personal unsecured loans, and loans between loved ones. You can also get vehicle loans and other secured loans discharged, but that also means that the property will be seized by the lien holder.
Non-dischargeable debts include student loans, fraudulently acquired debt, child support, and alimony. Even if an alimony-paying party receives bankruptcy belief, their alimony obligation—as well as their arrearages—will still remain.
How Alimony is Handled in Chapter 7 and Chapter 13 Bankruptcy
Making child support and alimony non-dischargeable protects those who are left vulnerable after divorce. While bankruptcy can run down your credit for years after filing, it would likely be worth it to some who truly want to get out of paying spousal support. This would put non-earning spouses and partners at serious risk of financial distress and make child support and spousal support orders almost meaningless.
While spousal support cannot be eliminated through bankruptcy, the type of bankruptcy filing does change how payments are handled. In Chapter 7 bankruptcy, alimony payments are unchanged. The paying party will still need to make those payments during and after their bankruptcy case, and the automatic stay does not affect monthly payments. The automatic stay also does not apply to wage garnishments or automatic deductions used to pay spousal support.
In Chapter 13 bankruptcy, debts are divided into priority and non-priority debts. Any amount of unpaid non-priority debts is discharged at the end of the payment agreement. Spousal support is considered a priority debt and should be paid in full every month.
Changes to Your Spousal Support Agreement
Your spousal support may not be directly affected by your ex’s choice to file bankruptcy, but it’s important to note that there are other ways this could change your financial status. If your ex is truly financially struggling and qualifies for bankruptcy, it’s possible that they are genuinely no longer able to make their full spousal support payments. If that’s the case, they may petition the court for an adjustment.
The court will take a range of factors into deciding whether or not a modification is warranted. For example, if your spouse’s sudden inability to pay spousal support is due to a new $1,000 per month car payment or $500,000 home, the court is unlikely to order a modification. But if their financial issues are caused by their employer shutting down and paying out minimal or no severance, a modification may be granted.
What to Do If the Spousal Support Payments Stop
We understand that sudden changes in income can affect your ability to take care of your family and home. If you receive alimony payments and your ex-spouse stops making payments, talk to a family law attorney to figure out what your next steps should be. If a modification is necessary, they must go through the proper legal channels to request one—they cannot simply stop making payments because they no longer want to be responsible for them.
Explore Your Legal Options with Coumanis & York
Are you struggling with your spousal support payments? Perhaps your ex regularly skips payments, threatens to withhold money, or claims that their bankruptcy filing absolves them of their responsibility to you. We’re here to help. Call Coumanis & York at 251-336-3121 or to schedule a time to talk to our team now.