If you were ordered to pay your ex-spouse alimony and have fallen behind on payments, you may be wondering if it's possible to get rid of the debt by filing Chapter 7 bankruptcy. In general, domestic support obligations such as alimony and child support are protected by law and cannot be discharged in bankruptcy. However, there are two exceptions to this rule that may allow a person struggling with alimony payments to legally eliminate the debt.
When the Debt is Reassigned
You can discharge a spousal support debt if the receiver reassigns the debt to another person or gets a third-party involved in the transaction between you two. For instance, your ex-spouse's family member gives him or her $2,500 and then your ex-spouse tells you to start giving the monthly alimony check to the family member. In this situation, the debt becomes eligible for discharge because it's been assigned to an unprotected party who you are not obligated to support.
However, you can only discharge the amount that's been reassigned to the third party. So in the previous example, only $2,500 of the alimony owed would be eligible for discharge because that's the amount the ex-spouse assigned to his or her family member.
Misclassified Alimony
Sometimes a divorce decree will order one party to pay another party alimony, but the money actually isn't for spousal support. A common way this occurs is when one party is ordered to pay alimony in lieu of giving up property. For instance, instead of giving up the family car, the ex-spouse makes alimony payments to his or her former spouse up to the value of the vehicle.
If you can prove an alimony order isn't actually designed to provide support as is traditionally defined then you could get the debt discharged in a Chapter 7 bankruptcy filing.
Spousal Objections
The court will notify everyone on your creditor's list about your bankruptcy proceeding, including your ex-spouse. Since alimony is protected debt, there will typically be a hearing or meeting where you'll have to prove to the court or trustee the alimony debt is eligible for discharge.
Even if the court allows you to include the debt in your bankruptcy filing, your ex-spouse can file an objection to the discharge of the alimony order. He or she will then be given a chance to show why the debt is valid. If your ex-spouse wins the objection, the debt will not be discharged.
Eliminating a spousal support order is often a complex matter. It's essential to work with an attorney who has experience in this area to help you obtain the outcome you need. For more information, talk to a place like Holth & Kollman LLC.
