Understanding Alimony: A Complete Guide to Spousal Support
Alimony, often referred to as ‘spousal support’, plays a crucial role in divorce proceedings. It’s not just about money but ensuring both parties can maintain their standard of living post-divorce. This came about years ago in traditional, heterosexual marriages where the man was the breadwinner and the woman stayed home to raise the children. Therefore, this put her at a financial disadvantage during a divorce. However, relationships look a lot different today, and alimony can be awarded to both men and women.
Defining Alimony
The basic definition of alimony revolves around financial assistance one spouse gives the other after separation or divorce. This obligation isn’t gender-specific; either spouse may be required to pay depending on circumstances such as income disparity and length of marriage.
To clarify, alimonies aren’t ‘winning prizes’ from divorces. They’re meant to help the lower-earning spouse get back on their feet financially until they regain self-sufficiency or remarry.
The Different Types of Alimony
Different types of alimony exist for varying needs. Temporary alimony offers financial aid during ongoing divorce proceedings while permanent provides long-term support following a lengthy marriage with significant earning capacity differences between spouses.
We also see rehabilitative which is granted when a dependent spouse needs time and resources for job training or education before reentering the workforce.
Lump-sum and reimbursement are unique categories where one spouse pays all at once rather than making periodic payments.
Is Alimony Dischargeable in Bankruptcy?
Bankruptcy can give you a fresh start, but it doesn’t mean that all debts disappear. When it comes to spousal support, the waters become complicated and unclear.
The dischargeability of alimony in bankruptcy is a topic shrouded with confusion and misinterpretation. The simple answer? No. Whether we’re talking about Chapter 7 bankruptcy or Chapter 13 bankruptcy and spousal support – none of them wipe out your duty to pay alimony.
In fact, both types have provisions for domestic obligations like child support and alimony payments. In essence, these obligations are treated as priority debts which means they take precedence over other unsecured debtors when the trustee distributes available funds.
This rule also applies even if there’s an agreement between spouses not to pursue unpaid amounts post-bankruptcy filing.
A Look at Different Chapters
Digging deeper into how different chapters impact this aspect gives us more insight. Let’s begin with Chapter 7, often referred to as liquidation bankruptcy.
Your non-exempt assets are sold off by the appointed trustee who then uses those proceeds towards paying your creditors – including any owed alimony – based on set priorities.
If we switch gears to Chapter 13, things differ slightly because here you work out a repayment plan spanning three-to-five years where you’ll be making monthly payments towards settling your debts, again including alimony.
Bankruptcy can be a life-saving solution to unmanageable debt. But remember – it won’t erase all of them, especially not alimony.
Conclusion
While life can throw us curveballs, paying alimony isn’t something we can dodge easily. Like child support, alimony is a domestic obligation that cannot be discharged in either Chapter 7 or Chapter 13 bankruptcy. However, bankruptcy can either restructure your payments or liquidate your debts to make it easier to pay alimony. To discuss your circumstances in further detail, contact The Law Office of William Waldner today.