If you’ve been receiving spousal support from your ex-spouse and just found out that he or she is filing for bankruptcy, it’s understandable to feel confused, even scared of the possibility of your ex not sending alimony. To ease your mind, know that spousal support payments won’t be discharged or affected if your ex-spouse files for bankruptcy. In some cases, however, the court could modify the spousal support order.
The Burnham Law Firm, P.C. shares more information about this matter.
Bankruptcy and Spousal Support Modification
In general, the court could modify spousal support orders during bankruptcy in these cases:
According to the Bankruptcy code, your ex could discharge spousal support payments if you transferred or assigned it to a third party, say a lender or a parent/relative, because you won’t be the one receiving it. As such, it’s not considered spousal support in the eyes of the law.
Your ex-spouse could likewise reduce the spousal support payment amount if he or she files for chapter 13 bankruptcy as a part of his or her debt repayment plan. The reason for this is that being bankrupt could impact your ex’s ability to pay support, which is a huge factor the courts use to calculate support amounts in the first place. The court would determine if your ex could live modestly within budget while also paying alimony. If not, the court will reduce the amount of support payments.
What You Could Do When Faced With a Bankrupt Ex-Spouse
You could enter your ex-spouse bankruptcy case as a legitimate creditor in the following ways:
Your ex-spouse sends you a “Notice of Bankruptcy” and lists you as one of his or her creditors.
You could file a “Proof of Claim” for particular assets, which would technically make you a creditor.
You could file a “Notice of Appearance” with the court managing your ex’s bankruptcy case.
Once the bankruptcy court registers you as a creditor, you will have to attend the creditors meeting. Your ex’s bankruptcy trustee would explain the payment terms during this meeting.
It’s crucial to note that no bankruptcy case is the same. While most of the steps are common in all bankruptcy types, you must educate yourself about the specific bankruptcy type your ex has filed for. This will help you act accordingly. When in doubt, consult a professional for legal guidance.