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How child support and alimony is treated in bankruptcy

On Behalf of | Aug 2, 2018 | Family Law |

California residents and others who owe child support or alimony cannot use either Chapter 7 or Chapter 13 bankruptcy to get rid of it. However, Chapter 13 bankruptcy may allow a person to pay the debt over 60 months. A bankruptcy court may also analyze a divorce decree or similar court order and determine that what is classified as a domestic support obligation is labeled correctly.

To be classified as alimony, a payment must be intended to be for the maintenance of a former spouse. However, if it is determined to be a part of a property division settlement, it may be eligible for discharge. Courts may also try to answer questions such as if the payment was actually labeled as support, if it was taxable in nature or whether it was meant to balance income between two former spouses.

If the payment is not deemed support, it can be discharged. When a parent owes child support, interest can accrue on any unpaid balance owed. It may also be possible for a parent to have his or her wages garnished or otherwise seized to pay down that balance. Fines may also be applied if support payments are not paid on time. Filing for bankruptcy may prevent additional financial penalties from being applied while the case is pending.

As child support is meant to help maintain a child’s standard of living, courts generally take failure to pay seriously. Since these payments are considered high priority, they are rarely discharged in bankruptcy unless they were improperly characterized. An individual who is struggling to make support payments may benefit from consulting with an attorney. Doing so may help to obtain a support modification order or help get payments reclassified to make them eligible for discharge in bankruptcy.