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Divorce support obligations and bankruptcy

On Behalf of | Jul 27, 2018 | Divorce

Divorced parents in Kentucky who get a divorce may be financially overwhelmed. In addition to debts like credit cards, they may also have past-due alimony or child support payments. While the bankruptcy process cannot be used to eliminate delinquent domestic support obligations, it may still be helpful with managing the past-due payments.

According to the bankruptcy code, a domestic support obligation is a debt akin to support, maintenance or alimony that is owed due to a divorce decree, property settlement agreement, court order, separation agreement or any other agreement that was established under non-bankruptcy law. The bankruptcy courts will closely examine the decrees and judgements issued from the family court to determine whether the provisions pertain to domestic support obligations or some other form of marital property. The distinction is important as domestic support obligations are not dischargeable while other types of marital property may be.

Less than half of the custodial parents in the United States actually receive the full amount of child support they are supposed to have as stipulated by an informal agreement or a court order. Custodial parents who are awarded child support tend to receive less than 70 percent of the support they have been awarded.

In Chapter 7 bankruptcies, many types of debts can be discharged or forgiven. Many debtors will be able to have a fresh financial start as personal loans, medical bills and credit card debt can be eliminated.

A divorce attorney may consider the circumstances surrounding a client’s divorce and advise which legal steps should be taken to resolve disputes regarding legal issues. Litigation might be used to obtain favorable settlement terms regarding spousal support, child support, the division of marital assets and other financial matters. The attorney may engage in negotiation to settle disputes regarding modifications to exist support orders.