In the United States, divorcing couples settle important financial decisions impacting their family through mediation or in court. The division of assets, alimony, and support are determined before the divorce is final. So, what happens when one spouse’s financial situation changes drastically and they decide to file for bankruptcy?
Surprisingly, bankruptcy may not have a big impact on alimony payments that have gone unpaid. Unlike credit card debt, medical bills, and personal loans, which are generally discharged with bankruptcy, alimony is a necessary expense that cannot be negated. Under Bankruptcy Code, alimony and child support have a super priority and are repaid in full over time.
Divorce and Alimony
Unlike other debts like credit card and doctor bills, alimony is intended to be used to support an ex-spouse’s basic needs like food, clothing, and household bills until they become financially self-sufficient. In Maryland, alimony must be requested before the marriage ends; neither spouse can go back to ask for alimony once divorce is final.
The courts consider many different factors when requesting and ordering alimony:
- Both spouses’ age and overall health and well-being
- Both spouses’ financial situation during the marriage and moving forward
- Why the marriage ended
- How long the couple was married
Depending on the couple’s situation, alimony be paid out while the divorce is being processed, for a limited span of time until the recipient spouse becomes self-supporting, or indefinitely if both spouses earning potential and lifestyles are significantly disparate.
Alimony and Bankruptcy
Without alimony, some individuals may find themselves in dire financial straits. For that reason, overdue alimony payments are not wiped out in bankruptcy provided they meet three general guidelines:
- The debt must be considered alimony, maintenance, or support.
- The debt must be owed to the ex-spouse.
- The debt must be formally ordered in a separation agreement, divorce, property settlement, or court order.
Garnishment and Alimony in Bankruptcy
In Chapter 13 bankruptcy, the debtor’s income is documented and their debts are prioritized. High priority debts are paid first and whatever income remains is distributed to the low priority creditors. This ensures that former spouses and children receive the funds to which they are entitled.
If the paying spouse falls behind in alimony payments and their wages are garnished, they do have some form of relief in bankruptcy. While these debts are not forgotten, garnishment orders can be stayed in Chapter 7 and Chapter 13 bankruptcies. In a Chapter 13 case, the paying spouse and their lawyer propose a payment plan to catch up on past due alimony, child support, and other priority debts.
Bel Air Alimony Lawyers at Huesman, Jones & Miles, LLC Help Clients Move Forward After Divorce
The experienced Bel Air alimony lawyers at Huesman, Jones & Miles, LLC help clients navigate and resolve complex family law matters around their divorce. To ensure you receive the support you need and to protect your interests after the marriage ends, trust the team with the experience and skill to help you achieve a positive outcome. We take the time to understand your unique needs and goals and work diligently to help you achieve them. To schedule your free, no-obligation consultation in our Hunt Valley or Towson, Maryland offices, call 443-589-0150 or complete an online contact form today.
We assist clients throughout the areas of Baltimore, Baltimore County, Bel Air, Bentley Springs, Columbia, Freeland, Hampton, Westminster, Essex, Monkton, Sparks Glencoe, Parkton, Phoenix, Pikesville, White Hall, Carroll County, Harford County, and Howard County, Maryland.