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January 04, 2020

Does Alimony Get Discharged If You File For Bankruptcy?

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Posted in Wisconsin Workers Compensation Related News

During a divorce settlement, it may have been established that one spouse pays recurring payments to the other in spousal support. This arrangement may have been created so that one spouse doesn’t endure severe financial hardship as a result of the separation. In many cases, spousal support is used for a specific duration of time until the receiving spouse can get onto their own feet financially.

But what happens if the paying spouse encounters a setback of their own? Are they able to get spousal support discharged by filing for bankruptcy? Here we answer that question, and more: 

Spousal Support is Nondischargeable Debt
When a debt is nondischargeable, it means that it cannot be eliminated by filing for bankruptcy. Other debts that aren’t dischargeable include local/state/federal taxes student loans, child support, and debts owed to a government agency. If the paying spouse files for bankruptcy, they should list their former spouse as a creditor. While the obligation may not be eradicated completely, there may be ways to get the spousal support reduced or temporarily put on hold.

Since every person’s financial situation is different, the best way to find out how to go about changing spousal support payments is to meet with a qualified attorney in your town. 

Requesting Spousal Support Modification
Depending on your circumstances, your attorney may suggest requesting spousal support modification if that is the primary reason you are enduring financial hardships. It can be devastating to file for bankruptcy and then realize that spousal support responsibilities will remain unchanged.

In general, to successfully prove that a reduction in spousal support is needed, you will have to show that your life has drastically changed in some way. If you are the paying spouse and cannot afford to meet your spousal support payments, you have to bring forward proof so the court knows the request is justified.

Once a motion to modify spousal support has been submitted to the court, there will likely be a discovery phase where each spouse will have to provide financial information, such as pay stubs, tax returns, expenses, and other financial statements. Legitimate reasons to request spousal support modification include: 

  • A loss of employment or pay reduction (involuntary)
  • A disability or illness impairs the paying spouse’s ability to work
  • The recipient spouse has remarried
  • The recipient spouse has begun cohabitating with a partner
  • The recipient spouse had a significant increase in income 

Getting Advice on Bankruptcy
If you still feel like filing for bankruptcy could be a useful resource even knowing that spousal support won’t be discharged, then it is advisable to meet with an attorney for guidance. There are six bankruptcy chapters, each with their own list of qualifications and eligibility details. These chapters include Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15. The most commonly used chapters are Chapter 7 and 13, but an attorney, like a bankruptcy, can counsel you on which will be most influential in strengthening your current and future finances. 

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