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Bankruptcy Law Blog

Monday, September 21, 2015

Bankruptcy & Family Law: How filing affects domestic matters

If I file for bankruptcy, can I avoid or reduce some of my alimony arrears?

Getting behind on the bills can be exceptionally stressful, and a consumer bankruptcy action can help alleviate some of the frustration that comes with overwhelming monthly obligations.  There are certain debts, however, that  are not dischargeable through the consumer bankruptcy process, and the Bankruptcy Code makes clear that most domestic matters cannot be avoided even with a total Chapter 7 liquidation.

No matter how difficult the financial landscape, child support arrears cannot be reduced, negotiated or discharged under any circumstances. However, filing for bankruptcy may help a debtor get caught up on the outstanding balance of the overdue support, and may even help reduce some of the other debts owed to unsecured creditors. When a debtor files for Chapter 13 protection, his or her debts will be prioritized – with child support arrears at the top of the list. The monthly child support payment will be amortized over the length of the repayment plan period and will be paid to the trustee, who will ensure the amount is properly distributed to the child(ren) in need of support.

Bankruptcy can also have an impact on divorce proceedings, and debtors are encouraged to seek thorough legal counsel prior to filing for bankruptcy if considering marital dissolution. In some instances, it may make sense to file for bankruptcy prior to divorce, as this can result in significantly reduced filing fees and court costs. Moreover, joint debtors may be able to have some of their debts discharged and forgiven, meaning the debts need not be distributed during the divorce action.

On the other hand, Chapter 13 consumer bankruptcy can take 3 to 5 years to complete, depending on the payment plan – which may not be feasible if a divorce is on the horizon. Likewise, those seeking Chapter 7 protection may have difficulty meeting income eligibility requirements by filing together, making it more beneficial to go through the divorce first.

If you are considering bankruptcy and are not sure how the proceeding will interface with your pending domestic matter, please do not hesitate to contact Padgett & Robertson in Mobile, Alabama today: 251-342-0264.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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