If you find that your alimony payments are more than you can handle financially, it may be tempting to consider bankruptcy as a way to avoid them. However, that’s probably not the best choice.
It’s essential first to understand the difference between Chapter 7 and Chapter 13 bankruptcy. In Chapter 7, some debts can be discharged. In Chapter 13, you have a court-mandated schedule for paying off your debts.
Alimony payments (also known as spousal support) aren’t usually dischargeable in bankruptcy. There are some exceptions, such as if your ex has assigned his or her alimony rights to a third party (perhaps a parent), who collects the money and then pays it to your ex-spouse. Another exception would be if you agreed to provide some type of additional financial help, such as paying off your ex’s credit cards. That portion of your obligation may be dischargeable. However, nothing that is considered “in the nature of support” is dischargeable in bankruptcy.
Although in most cases you can’t discharge alimony payments in Chapter 7, by discharging other obligations, you may be better able to make your spousal support payments. Meanwhile, if you file Chapter 13, you can set a schedule for paying any back alimony you owe. However, you need to be fully caught up on any back payments before you can emerge from Chapter 13.
As you can see, bankruptcy is generally not a solution to getting out from under your support obligations. If they are more than you’re able to handle, you should talk with your family law attorney about seeking a modification to your payments. However, if your support payments along with other obligations are placing you in difficult financial straits, it may be wise to talk with a New Jersey bankruptcy attorney to determine whether this still may be a wise choice for you.
Source: The Nest, “Can My Ex Sue Me for Back Alimony After I Filed Bankruptcy?,” Scott Thompson, accessed May 03, 2017
