When a spouse has declared bankruptcy they have entered a legal status saying they are unable to pay their creditors. Alimony is a legally mandated payment from one spouse to another. The other spouse might worry that bankruptcy would affect alimony payment. This is not the case, but there are still some elements you must be aware of in this situation.
You’re Still Entitled to Alimony
If you’re the spouse owed, this is good news. Alimony is considered a dischargeable debt, which means it cannot be written off due to bankruptcy, the same as child support or taxes. Some spouses file for bankruptcy in hopes of avoiding some of these payments, but they’re still obligated.
You’re Not Entitled to “Non-Support” Payments
While alimony will not be affected by bankruptcy other “non-support” debts owed to you may be affected by the filing. Chapter 13 of the U.S. code regarding bankruptcy states: you may not discharge any debt “to a spouse, former spouse, or child of the debtor” “in the nature of alimony, maintenance, or support” but, you can discharge debts arising out of a divorce, separation, or marital property settlement other than those “in the nature of alimony, maintenance, or support.”
What encompasses support and non-support may be interpreted from the specific terms of your divorce. Non-support payments are usually collected when a spouse has agreed to pay off certain debts acquired during the marriage or when a spouse is paying the former spouse to make up for receiving more physical assets, such as the family home.
Your Alimony May Still Change
While alimony cannot be discharged by bankruptcy, a change in financial circumstances for one spouse may open up the possibility to alter the amount. No matter how long the marriage lasted, maintenance payments are not intended to be lifelong.
Sometimes a court may order a “Gavron Warning” which has been codified in Family Code 4330(b) which states: “(b) When making an order for spousal support, the court may advise the recipient of support that he or she should make reasonable efforts to assist in providing for his or her support needs, taking into account the particular circumstances considered by the court pursuant to Section 4320, unless, in the case of a marriage of long duration as provided for in Section 4336, the court decides this warning is inadvisable.”
This means the court may impose adjustments on alimony that take into consideration things such as:
- Marketable skills
- The ability of the supporting party to pay
- The needs of each party
- Tax circumstances
- The goal of the supported party to be self-sufficient
- Any other factors the court deems relevant
In these cases, one spouse’s bankruptcy may be taken into consideration.
Solving Issues Involving Bankruptcy and Alimony
Bankruptcy is not a way for your spouse to escape payments obligated to you under alimony, but some financial support elements may be altered by this change in circumstances. If you or your former spouse plan to file for bankruptcy, you should contact a lawyer for further legal assistance. If you have more questions about alimony or support matters, please contact us at 714.456.9118 or send us an email at info@voneschlaw.com. We want to help ensure you are treated fairly in this often difficult matter.
