Bankruptcy

WILL BANKRUPTCY REMOVE MY CHILD SUPPORT OBLIGATIONS?

Bankruptcy’s effect on child support is very similar to its effect on alimony. Past-due child support is not dischargeable in bankruptcy. If one spouse owes child support but has not paid because of hard times, the past-due amount still must be paid. A bankruptcy court can discharge many debts, but the court cannot discharge a child support debt (or an alimony debt). Severe financial problems (as evidenced by the bankruptcy) could be a basis for reducing future child support payments, but not for reducing past-due payments. 

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DIVORCE AND EFFECT OF BANKRUPTCY

A property settlement might be dischargeable in bankruptcy or it might not be dischargeable, depending on the facts of the case. A discharge in bankruptcy means that all of a debt or a portion of a debt no longer has to be paid, because a federal court has declared the debtor to be bankrupt. 

Prior to 1994, many former spouses of persons who declared bankruptcy after the divorce found themselves out of luck when seeking to collect what was due. A wife, for example, may have agreed to a divorce based on a promise from her husband that three years after the divorce, he would pay her a certain amount of money as part of the property settlement. If after the divorce was finalized, the husband declared bankruptcy, the wife might never collect the amount that was due.