Domestic Support in Bankruptcy

Published Date: January 16, 2014  - Category: Blogging  - Views: 53  .

When you file for bankruptcy, you will be asked if you have “domestic support obligation.” . If you have such duties, it is important that you know how the bankruptcy law deals with this particular type of debt.

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The law has a broad definition of domestic support orders. Domestic support consists of a debt or obligation to pay alimony, child support, maintenance and other kinds of support. The source of such obligation is a court order, which could be a separation agreement or divorce decree. Other payments that can be included are debts that were built up jointly, expenses one is required to pay in a divorce decree, and attorney's fees.

The payees are usually the parent of the child, spouse, ex-spouse, or guardian. If you are facing a divorce as well as financial problems you should find an experienced attorney who handles divorce and bankruptcy cases.

Dischargeability of debt is a primary principle in bankruptcy law, and it provides a "fresh start" for people who are knee deep in debt. A bankruptcy discharge eliminates liabilities and ceases collection activity of creditor for the forgiven debt. But there are some debts that are not dischargeable in bankruptcy, such as child support and alimony.

According to the Bankruptcy Code, the initial requirement for preventing bankruptcy discharge of a domestic support is that it was accrued from a divorce decree or separation agreement. Additionally, the obligation should be in the nature of spousal support or maintenance. A vital factor is that domestic support is automatically exempted from the bankruptcy discharge except if the debtor challenges the nondischargeability in court.

Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the term "domestic support" was added in the Bankruptcy Code. Domestic support obligations are cannot be discharged in Chapter 7, and may be absolved in Chapter 13 only within specific circumstances.

The Bankruptcy Code determines dischargeability as a matter of federal law. To determine a support obligation is dischargeable or not requires the application and/or understanding of the state law where the support was ordered. This issue can become difficult to resolve when the support order and divorce decree are granted in one state, and the bankruptcy case is filed in another state.

A recent divorce is one of the common reasons why people file for bankruptcy. The parties that formerly shared incomes for all expenses in one house are now paying for expenses of two homes with only one income. Aside from that, there is hardly any money remaining for either party to cover its credit card debt with the growing living expenses.

If you want to get rid of any or all of your debt after a divorce, you should talk to a San Antonio Bankruptcy Lawyer. Bankruptcy can offer you the opportunity to effectively pay down that debt by freeing you from other financial obligations and freeing up income. Before you file for bankruptcy, prepare an account of the domestic support obligations you paid to make sure that you will be able to provide proof when necessary.

 

 
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