My Ex Owes Support and is Filing for Bankruptcy: What Now?

We previously wrote an article regarding the dischargeability of domestic support obligations, such as child support and alimony. But just knowing that the arrears are not dischargeable may not be enough. How do you collect them without violating bankruptcy law?

If you are owed child support, alimony, separate support or money or property pursuant to a divorce separation agreement, and the other party files for bankruptcy, it is important that you first know your rights regarding the dischargability (or non-dischargability) of those obligations. Each of the above are handled differently depending on the type of obligation (support versus a property settlement) and the type of bankruptcy (Chapter 7 or Chapter 13).

CHAPTER 7 CASES

In Chapter 7 Cases, the answer is simple: domestic support obligations and divorce property settlements are non-dischargeable. According to the bankruptcy code at 11 U.S.C. § 523(a):

“[a] discharge [in a Chapter 7 Case] does not discharge an individual debtor from any debt… (5) for a domestic support obligation; [or] (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit."

So, if a payor owes you back child support, alimony or or property division payments pursuant to a divorce agreement you should file an objection to the discharge of those debts, and then pursue your rights in the Probate and Family Court to obtain payment.

CHAPTER 13 CASES

Debtors may use the bankruptcy protections of Chapter 13 to pay back child support arrears according to the chapter 13 plan and avoid a potential contempt in Probate and Family Court. Therefore, most issues regarding unpaid child support or alimony (and payment of support arrears) arise in Chapter 13 Bankruptcy Cases. However, while bankruptcy can provide some protection to the debtor to pay back support over the course of the plan, the debtor must meet all requirements of the Massachusetts Local Bankruptcy Rules and the U.S. Bankruptcy Code in order to ensure they receive their discharge upon the completion of their plan.

A discharge in a Chapter 13 Case does not discharge an individual debtor from any debt for a domestic support obligation, but may discharge other debts, including debts arising out of a divorce or separation agreement that are not dischargeable in a Chapter 7 case. See 11 U.S.C. § 1328(a).

In order to receive a discharge of other debts (but not domestic support obligations) in a Chapter 13 case, the debtor must successfully complete the repayment plan, and must file a Motion for Discharge, and certify that all obligations for child support, spousal maintenance and alimony due that were due on or before the date of the motion, including all payments due under the plan for amounts due before the petition was filed and any domestic support obligations that arose after the filing of the petition have been paid. The debtor must serve a copy of the motion and certification on the beneficiary of the domestic support obligation.

At that point, the beneficiary may object to the entry of the debtor’s discharge if there are outstanding obligations and a discharge will not be granted unless all obligations have been paid. See 11 U.S.C. § 1328(a). See also Massachusetts Local Bankruptcy Rule 13-22 and Official Local Form 12.

However, there is one exception: domestic support obligations that are assigned to a governmental unit (i.e., collected by the Department of Revenue and distributed to the beneficiary) may be paid less than 100% through the plan, but only if disposable income is dedicated to the plan for a full five years. In this case, the debtor would continue to owe any child support not paid at the completion of the plan and DOR would continue to be involved at the end of the bankruptcy case.

Finally, bankruptcy will not change the current support obligations following bankruptcy. At the conclusion of either a chapter 7 or chapter 13 bankruptcy, the debtor’s obligations to pay child support remain unchanged, and must pay any obligations unless and until amended by an order of the Probate & Family Court. If you want to know more about amending support orders in the Probate & Family Court in Massachusetts view our information on Modifications.