Bankruptcy and Alimony

Following a divorce, one spouse may be court-ordered to pay a monthly compensation fee to the other spouse for a set period of time. This fee is known as alimony. Because this is a support payment, back-owed alimony is not dischargeable in bankruptcy.

Although it will not wipe out your alimony debts, filing for bankruptcy can make paying alimony more manageable. If you have fallen behind on alimony payments because of a difficult financial situation, contact the Arizona bankruptcy lawyers of the Harmon Law Office, LLC, today at 480-829-0494 for a free consultation.

Forms of Bankruptcy

The two branches of consumer bankruptcy – Chapter 7 and Chapter 13 – work in somewhat different ways. Although neither allows an individual to discharge an alimony debt, alimony debts can be made more manageable, since other debts get reduced or eliminated.

Chapter 7 bankruptcy allows individuals to:

• Liquidate their assets
• Pay creditors
• Discharge certain debts

Chapter 13 bankruptcy, on the other hand, allows individuals to:

• Keep their assets
• Work out cheaper payment plans with creditors
• Pay off debts over time

Any debt that is considered a support payment, however, cannot be modified. This includes alimony. Under Chapter 7, this debt cannot be discharged and under Chapter 13, the individual cannot work out a cheaper alimony payment plan through the court.

Contact Us

Some individuals may benefit from declaring bankruptcy when they fall behind on their alimony payments. If you have fallen behind on alimony payments because of your financial situation, contact the Arizona bankruptcy attorneys of the Harmon Law Office, LLC, at 480-829-0494 today for a free evaluation.