Guest post written by Christina Vilaboa-Abel, Esq. of Cava Law.
The intersections between family law and bankruptcy are quite a few, but the most common is the common misconception that domestic support obligations, like child support or alimony, are somehow dischargeable in bankruptcy.
To be clear, the Bankruptcy Code does not allow for child support or alimony payments to be eliminated in a bankruptcy proceeding. In fact, the Bankruptcy Courts take extra precautions to assure this kind of debt is properly treated when a bankruptcy is filed, however what a lot of people do not research further is that bankruptcy has other ways to give debtors a fresh start and get their finances back on track. Most people think of bankruptcy as simply elimination of debt, like in Chapter 7 bankruptcies, however bankruptcy law has other chapters that help Debtors find relief.
For example, if a Debtor is behind on child support or alimony and files a Chapter 13 bankruptcy, any arrears owed on non-dischargeable debt, such as this kind, can be cured and the Debtor can be brought current on his or her domestic support obligations, using a payment plan confirmed by the Court, the bankruptcy trustee, and the parties. This sort of debt negotiation within Chapter 13 bankruptcy plans is quite common and can be done with all sorts of non-dischargeable debts, such as child support, alimony, and debt owed to the IRS.
In fact, although the Southern District of Florida has not approved it yet in South Florida, there are bankruptcy courts in other jurisdictions that have even initiated a special negotiation program within Chapter 13 bankruptcy for student loans, which are also non-dischargeable (stay tuned for that, perhaps in another newsletter!).
Bankruptcy, especially using Chapter 13, has been a useful tool for many when it comes to getting a fresh start, post-divorce, and making sure all financial obligations are met.