A common question we face at the Needleman Law Office is how bankruptcy affects alimony. The answer is complicated, but not terribly so.
As a Columbus bankruptcy lawyer, my job is to give you the information you need to make the best decisions, and alimony is one of the factors that must be taken into consideration.
So with the necessary disclaimer that this is not legal advice and you should contact our law office for a free consultation to talk about your specific situation, here are five important things to know about bankruptcy and alimony.
1. Columbus Bankruptcy Probably Won’t Discharge Your Alimony Obligations
This is the question you’re probably most wondering about if you’re looking for a bankruptcy lawyer in Columbus with court-ordered alimony payments to make.
The answer is fairly clear to this question. Chapter 7 and Chapter 13 bankruptcy can wipe away or restructure certain types of debts – generally unsecured debts like credit cards and medical bills. Alimony, however, falls under a different category and is not dischargeable in a Columbus bankruptcy.
Generally, there is an automatic stay placed on debt collection efforts when the bankruptcy is filed, but this likely will not affect your alimony payments either. In the majority of cases, you will need to continue making your court-ordered alimony payments on schedule, during, and after the bankruptcy proceedings.
However, that does not mean you have no options for bankruptcy with your Columbus bankruptcy lawyer.
2. Columbus Bankruptcy Can Make Payments Easier
While it’s true that you won’t be able to discharge your alimony payments in bankruptcy, getting rid of several of your other debts and payments can make your remaining alimony payments easier to manage.
There are many types of debts that bankruptcy cannot discharge entirely, but rarely are people looking to work with a bankruptcy lawyer in Ohio just to discharge a single debt. By looking into your options for bankruptcy, you can discharge some of your debts and payments and make the others much easier to handle.
3. Alimony Payments May Affect Your Eligibility for Bankruptcy
If you’re making alimony payments, that may actually make it a bit easier for your Columbus bankruptcy attorney to help make your bankruptcy successful.
During means testing, which determines whether your disposable income level qualifies you for a chapter 7 bankruptcy in Ohio, alimony payments are listed as an expense on Schedule J. Similarly, if you are the recipient of alimony payments, they are listed as income on Schedule I.
Means testing weighs your expenses against your income to determine if you qualify for bankruptcy, so the oversimplified version is that making payments makes you more likely to be eligible, and receiving payments makes you less likely to be eligible.
4. Columbus Bankruptcy Rules Apply to Child Support and Family Support Obligations As Well
The United States Bankruptcy Code specifically mandates that an individual debtor cannot be discharged from “domestic support obligations.”
A domestic support obligation includes alimony, of course, but more than that, it refers to any debt (and its interest) that is owed to or recoverable by a spouse, child, or child’s guardian, among others.
That means child support and other family support payments made under a separation or divorce agreement are still binding and active after bankruptcy.
If you need help determining your options for bankruptcy, and what may be the best way to deal with your debts – even if that way isn’t bankruptcy – contact the Needleman Law Office today. Scott Needleman is a Columbus bankruptcy lawyer who has been helping clients work through their debts for decades, and we want yours to be next.