Before the coronavirus pandemic (COVID-19) of 2020, millions of Americans were already living paycheck to paycheck. In the middle of March, President Donald Trump declared a national emergency in an effort to stop the spread of the virus, and in a matter of days, governors across the country systematically shut the nation down.
While essential businesses kept their doors open, “non-essential” businesses had no choice but to close their doors. The result? Millions of Americans lost their jobs. Due to the pandemic, many people are finding it hard to pay their bills, let alone their monthly spousal support payments. If this describes you, you may be thinking about filing Chapter 7 and if so, you’re probably curious if spousal support debt can be discharged in bankruptcy.
Can You Wipe Our Spousal Support?
There are a lot of debts that can be erased, discharged, or “wiped out” with Chapter 7 bankruptcy, including medical debt, certain taxes, credit card debt, and personal loans, but spousal support? No, that cannot be reduced or eliminated with Chapter 7 or Chapter 13 bankruptcies. But how come? Because, Congress decided that spousal support, along with child support, is too important to discharge in bankruptcy.
The types of debts that can’t be discharged in bankruptcy include:
- Spousal support
- Child support
- Recent taxes
- Criminal victim restitution (for crimes committed)
- Most student loans (unless the debtor can prove hardship)
Filing Chapter 7 bankruptcy can still be very beneficial for debtors who owe spousal support. This is because by discharging or erasing qualifying debts like credit card debt, it frees up the debtor’s income so they can get caught up on spousal support.
If you cannot afford your current spousal support obligation, you may benefit by filing bankruptcy and we strongly recommend petitioning the family court to modify your spousal support payments – this could mean reducing or terminating them.
To explore all of your legal options, contact Arnold Law Group, APC today!