How Does Bankruptcy Affect Alimony?
Bankruptcy can have a serious impact on alimony payments from a former spouse. When one party files for bankruptcy, it is important to understand how this will affect any existing alimony order. Generally speaking, alimony payments are not discharged in bankruptcy and must still be paid despite the filing of the petition.
When a debtor files for Chapter 7 or Chapter 13 bankruptcy protection, an automatic stay is put into effect which temporarily stops collection efforts by creditors or other parties owed money. This includes those receiving alimony after a divorce decree has been issued; however, there are some exceptions if the debt qualifies as spousal maintenance under the Bankruptcy Code. Alimony obligations that were created prior to filing for bankruptcy may continue to be enforced and must be met even after the discharge of other debts.
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