Results tagged “bankruptcy” from Sacramento Family Law

In today's economy, everyone's dealing with financial pressure. Whether you are paying or receiving spousal and child support payments, you may be facing a lot of challenges these days. Either the payor or the payee could be out of a job or dealing with reduced hours and a reduction in pay. Either way, those alimony and child support payments are probably weighing heavily on your mind.

If you're behind on your alimony or child support -- or if your ex is -- you may be wondering whether bankruptcy will make those back-payments go away. It won't.

Alimony and child support payments are not dischargeable in bankruptcy. In fact, under bankruptcy law, spousal and child support payments have to be paid before any other creditor can take a piece of the debtor's assets -- even the tax man.

What Should I Do If My Ex Owes Child Support and Alimony And Is Filing for Bankruptcy?

Just because the law doesn't allow alimony or child support to be wiped out by bankruptcy does not mean you don't need to protect your interests. Just like any other creditor, you should make sure the bankruptcy court knows that you're pressing your claim by filing a "nondischargeability complaint" concerning any alimony or child support you are owed.

Both the bankruptcy trustee and the Child Support Enforcement program should notify you if your ex has filed for bankruptcy, so you should never be taken by surprise. Even if you do nothing, it is unlikely that the bankruptcy court would discharge the back-child support or alimony arrearages your ex owes you, but it's always a good idea to get good legal advice and protect yourself.

Continue reading "Bankruptcy Won't Clear Up Spousal or Child Support Arrearages" »

When financial stress forces you to file for bankruptcy, child-support payment obligations remain in place and are not dischargeable by filing for bankruptcy. All expenses that are considered as 'in the nature of support' for your child like those spent in the child's welfare, medical care and upbringing, are also not dischargeable in the event of bankruptcy.

Case of ex-spouse paying child support:

If you are an ex-spouse paying child support, whatever expenses you owe - back child-support and the current amounts you owe - whatever is due is still your responsibility and you have to pay them. And supposing there are any debts incurred to meet the 'in the nature of support' expenses - like expenses incurred towards meeting medical expenses and routine care, those debts also need to be paid by you, and bankruptcy does not absolve you from paying these charges.

Effect of stay orders on child support:

In case you are a provider of child support and you have filed for bankruptcy, under a Chapter 7 stay, action can still be taken to ensure that you pay for your child support. A Chapter 13 bankruptcy may provide you a temporary stay from payments towards child support. But any stay is only temporary.

Bankruptcy ensures payment of child support:

Actually if you happen to want to genuinely pay for the child support but had been unable to because of other payments, bankruptcy is the best option for you. Once you file for bankruptcy, you can prioritize the child support payment as required by the law and pay it first and you are given time to pay other debts subsequently.

Whatever income you receive automatically goes first to meet the child support, while other debts take backstage. Bankruptcy filed under both the Chapters 7 &13 ensures that child support is paid at the first instance. Even property exempt from the claims of creditors and lenders can be used for enforcing the child support payments.

Case of ex-spouse receiving child support:

If you are collecting child support, filing for bankruptcy will not protect the ex-spouse/child-support giver from paying the back or current child support. Filing for bankruptcy is not an escape route from payment of child support. Child support has to be paid before paying even those debtors who have initiated the action. The receiving spouse can seek legal recourse for speedy and regular payment of child support.

Payment of child support - back, current and future support:

After bankruptcy is filed, especially under Chapter 13, child support payment becomes an essential part of the reorganization of debt plan. Non-payment of back, current and future child support may nullify the bankruptcy and penalties may be imposed. All other obligations - payday loans, credit cards or medical bills - take a back seat and the highest priority is to the back, current and future child support payments.

As per government rules, 'domestic support obligations' take precedence. When you file for bankruptcy, the actual fact is that as a provider ex-spouse/parent, you are still responsible for back or current future payments towards those obligations.

Continue reading "Child Support and Bankruptcy" »

Delays. Mediation. Cohabitation. The recession is complicating the already messy process of breaking up.

A couple recently stopped by divorce attorney Ron Ousky's office with lousy news. The husband's income was just slashed by $100,000 and the couple needed an unbiased financial planner to figure out if they could still afford to split.

They delayed their divorce by several months to rework finances and whip up a new settlement based on lower income.

You've heard of love in springtime. This is divorce in recession.

Layoffs, wage cuts, foreclosures and other financial setbacks are forcing many couples into reworked settlements, creative separations and postponements, divorce experts say. Enrollment in self-help classes for divorce is also rising.

"There are a lot more complex situations that we have to deal with because of the recession," said Amy Wolff, owner of AJW Financial Inc., which advises divorcing couples. "I have seen many more husbands and wives where one of them is laid off. It's certainly more difficult to divorce when they [suddenly] have one wage."

At Ousky's law firm in Edina, a team of mediators, financial planners and other experts assists about 70 people a year with divorce. He said more people are delaying divorce or staying in their homes longer because of financial problems.

Some marriage-weary spouses opt for mediation, which costs less than fighting in court, Ousky said. In Hennepin and Ramsey counties, court officials said more divorcing parties are representing themselves to save on legal fees. More people are also asking the state courts to waive divorce filing fees because they don't have the cash.

The National Marriage Project recently reported that divorces fell 4 percent in 2008, for the first time since 2005. The American Academy of Matrimonial Lawyers (AAML) reported that 57 percent of its 1,600 members have seen divorce filings plummet. The numbers are less clear in Minnesota, but professionals say the recession is having an impact here.

Separated -- in the basement

The scenario turns all the crueler when you throw in the conversion of one household into two.

"Some [spouses] are agreeing to stay in the basement just because they are waiting for the market to improve" before finalizing a divorce, said Nancy Peters, public affairs director for Hennepin County District Court.

Others haven't even started the divorce process because they don't have the money, she said.

"I know one guy moved into his car after splitting with his wife, but he didn't want the kids to see that he was homeless," Peters said.

In another, unrelated case, a man told his wife last summer he wanted a divorce, but then was told he would soon lose his job. Selling their home to save on the $2,000-a-month payment wasn't an option because four other houses were for sale on the block. Instead, the husband moved into the basement, where the woman ran her photo-studio business.

"I was bewildered for months," said the woman, who spoke on condition of anonymity to protect the couple's privacy. She began looking for a job, hoping to get one with benefits. But no one hired her.

"It's absolutely crazy. We are together only because I don't have a job and he doesn't make enough for me to divorce him and collect lots of alimony that would support the kids," she said. "If there's a silver lining, it only that this has required both of us to act very adult-like and our kids have benefited."

Continue reading "Divorce? In this recession, it's anything but fun" »