Divorce & Bankruptcy in Florida
Your divorce is final. Your ex-spouse has agreed to terms of the marital settlement agreement, including monthly alimony payments owed to you, in addition to child support for your two shared kids. Now he is calling to tell you he filed Chapter 13 bankruptcy and can no longer meet his obligations. What do you do now? Can he really stop paying alimony and child support?
Understanding U.S. Bankruptcy Codes
Individual bankruptcy is covered under Chapter 7 and Chapter 13 of the United States Bankruptcy Codes. Declaring Chapter 13 bankruptcy allows the debtor to discharge unsecured debts owed that do not exceed close to $380,000 and secured debts that do not exceed over 1.2 million dollars. Debtors are only eligible to file for Chapter 13 bankruptcy if they have steady monthly income and are able to make minimum payments on their debts. They are required to pay fees and debts owed directly to the bankruptcy trustee assigned in court. Chapter 13 offers various protections to individuals that are eligible. Because a payment plan is usually established, the person’s home is often saved from foreclosure and they are able to maintain possession of their checking account.
Individuals who are ineligible for Chapter 13 filing sometimes choose to file Chapter 7 instead. During bankruptcy proceedings, the bankruptcy trustee assigned to the debtor will inventory and repossess the debtor’s personal and real property that is not exempt, and sell or redistribute that property to the creditors. This can result in substantial loss of property to the debtor, not to mention loss of a home and major damage to their credit report and savings. Finally, some individuals file Chapter 11 bankruptcy, which is usually reserved for businesses. Filing Chapter 11 means there is no cap on debt owed, but the debtor must close all operating checking and savings accounts and open a debtor in possession (DIP account).
What about Past Due Child Support and Alimony?
So what does all this mean for family law cases? First of all, child support cannot be discharged in bankruptcy proceedings, no matter what chapter the debtor files under. Discharged means the debtor is released from paying the debt, so in other words, bankruptcy has no bearing on a parent’s obligations to pay child support. In addition, bankruptcy also does not dissolve alimony obligations. However, in some limited cases the court may stay alimony payments pending the resolution of bankruptcy proceedings. If your ex refuses to pay child support or alimony, you will need to file a motion to compel or file a motion in court alleging that your ex is in contempt of the divorce order or incorporated parenting agreement. The presiding judge will subsequently find the defendant in contempt, order a money judgment in your favor until child support in arrears is paid, or levy additional fines against the defendant. Attorney William Wallshein can assist you in determining the best strategy for receiving payments you and your children are owed.
Call Attorney William Wallshein Today
No one gets married expecting to get divorced. No one starts a business or buys a house expecting to file for bankruptcy, but reality sets in. While it can be confusing, and bankruptcy is complicated, one issue is guaranteed, child support cannot be discharged. A parent has a duty to their child to provide for that child until the child reaches the age of majority, and there are no exceptions. If your ex-spouse is refusing to pay child support or alimony, and is blaming a recent bankruptcy filing, you need to take action. West Palm Beach child support attorney William Wallshein will fight to ensure you receive the benefits and payments you are entitled to according to your divorce order. Call today to schedule a consultation.