How Does Bankruptcy Affect Alimony and Child Support Payments?

Marital breakdown can change your financial situation drastically, especially if you have to make court-mandated payments to your former spouse after your divorce. If you’re in this position, you may well be wondering How does bankruptcy affect alimony and child support payments?

Unfortunately, bankruptcy generally cannot get you out of paying child support or alimony in Massachusetts. However, it can create space in your financial life generally, which may make it easier for you to meet these obligations without falling deeper and deeper into debt.

If you’re considering bankruptcy in Massachusetts, it’s crucial to understand how these principles should affect your decision.

How Does Bankruptcy Affect Alimony and Child Support Payments in Massachusetts?

According to data from the U.S. Courts website, the number of non-business bankruptcy filings has been rising sharply over the last couple of years. With the cost of living continuing to increase, this trend could continue for a while yet.

Bankruptcy is a powerful tool for those with financial struggles, but it’s not a cure-all.

In Massachusetts, as in the rest of the United States, alimony and child support are categorized as “domestic support obligations.” This classification renders them non-dischargeable in bankruptcy proceedings.

When you file for bankruptcy, an automatic stay is typically enacted, halting most collection activities. However, this stay doesn’t affect actions related to alimony or child support.

Essentially, this means that filing for bankruptcy will not get you out of paying these bills. While bankruptcy filings protect you from collection actions from many types of creditors, your former spouse will still be able to pursue you for unpaid child support or alimony whether you file for bankruptcy or not.

Additionally, if you file for Chapter 7 bankruptcy and have your assets liquidated, some of the proceeds of the liquidation may be put toward arrearage in your child support or alimony payments, even though your obligations in this regard will not be discharged.

What Other Debts Does Bankruptcy Not Affect?

Child support and alimony aren’t the only debts that bankruptcy can’t touch. Whether you’re filing Chapter 7 or Chapter 13, some obligations will stick with you no matter what. Here’s a breakdown:

• Recent tax debts: Income taxes, at both the state and federal level, typically can’t be discharged.
• Student loans: Unless you can prove “undue hardship“—which requires a separate proceeding—you’ll likely still owe the full amount.
• Debts from fraud or intentional misconduct: If a creditor proves you committed fraud, embezzlement, or willful injury, any debts arising from this wrongful act will not be discharged.
• Court fines and criminal restitution: Any financial penalties tied to criminal cases—including DUI fines or restitution to victims—are typically non-dischargeable.
• Debts for personal injury from drunk driving: If you caused an injury while driving under the influence, the resulting debt to the injured party can’t be eliminated through bankruptcy. It’s important to note that these expenses are separate from any financial penalties related to criminal convictions, as discussed above.
• Loans from retirement accounts: If you borrowed from your 401(k) or pension, you’ll still be on the hook for these loans post-bankruptcy.

Special Considerations: Expenses and Bankruptcy

So, bankruptcy won’t clear your child support or alimony expenses. However, this doesn’t mean that bankruptcy can’t help you regain control of your financial affairs.

Even if you can’t affect your child support or alimony obligations directly via bankruptcy, you can discharge other debts and give yourself breathing room that will allow you to make payments to your former partner more comfortably.

If you’re struggling with your cash flow specifically because of your situation with your ex, bankruptcy might help you to deal with:

• Arrears on domestic support obligations: If you’re behind on alimony or child support payments, Chapter 13 bankruptcy allows you to incorporate these arrearages into a repayment plan. This approach enables you to catch up over time while maintaining current payments. It’s important to note, though, that you’ll need to keep up with scheduled repayments in order for your Chapter 13 filing to succeed. If you start missing them, the court might revoke your automatic stay and cancel the planned discharge of your debts, leaving you back where you started.
• Other divorce-related debts: Obligations arising from divorce settlements, like property division debts, may be dischargeable in bankruptcy. However, this depends on the nature of the debt and the chapter under which the bankruptcy is filed.

Alternative Avenues to Adjust Child Support or Alimony Payments

Bankruptcy is rarely the only option if you’re facing financial trouble, unless your case is very advanced. If bankruptcy won’t work for you because your money issues are related solely to child support or alimony, there are some alternatives you can consider.

Court-Ordered Modification Due to Changed Circumstances

It is possible to petition the court to have your child support or alimony modified. This is particularly likely to succeed if you can demonstrate that your financial circumstances have changed significantly (such as through a job loss, a pay cut, a drop in profits in a business you own, or increased expenses). In fact, this is one of the most common reasons for the successful modification of child support or alimony.

A move like this is more likely to be successful if you enlist the help of a lawyer who specializes in family law. You’ll need to collect and present various forms of evidence related to your circumstances, and persuade the court that a change to your payment schedule would be a fair outcome. Remember, your former partner’s attorney will likely argue exactly the opposite, so you may need to prepare for a fight.

If you’d like to learn about the strategies that might make this work in your case, reach out to our firm today to schedule a free initial consultation.

Agreement Between Parties

If your former partner is open to a productive discussion about your situation, you may be able to arrange a more manageable payment schedule without the hassle and expense of a legal battle. However, you’ll still need to submit a joint petition to the court to ensure your new agreement is legally sound. If you alter the terms of your agreement without court approval, you could be vulnerable to legal action later on, potentially making your situation even worse than it was to begin with. Again, it’s worth discussing all this with a competent lawyer who’s experienced in this practice area.

Overcoming Financial Challenges While Upholding Support Obligations

The average American is currently experiencing unprecedented financial pressure. If you’re feeling the pain and you don’t know what to do, it’s important to be aware that help is available.

Contact our firm today to schedule a free initial consultation about your case. We’ll tell you what you need to hear, not what you want to hear. You can reach us by calling (978) 744-8818 or by filling out the contact form on our website.