Filing for Bankruptcy as an Ex-Wife Receiving Alimony

By Tom Streissguth

Filing for bankruptcy means asking a court to protect you from creditors and either cancel or reduce your debts. There are forms to file and schedules to fill out; you must disclose all creditors, debts, income and assets. Carrying through on a bankruptcy case can be difficult and time-consuming; if you receive alimony, the picture may get even more complicated.

Bankruptcy Options

As an individual, you have two bankruptcy options. With a Chapter 7 petition, you ask a federal court to discharge, or cancel, certain debts. Bankruptcy laws determine which debts can discharged. Some debts, such as income taxes and federally insured student loans, cannot be discharged. In return for having your debts discharged, you allow a court trustee to seize your property and sell it to pay your creditors. You may protect exempt property, such as Social Security benefits, clothing and household goods, from seizure. With a Chapter 13 petition, you set up a schedule of manageable monthly payments to your creditors through the trustee; in most cases the law obliges them to accept a partial repayment, and then allow a discharge of any remaining balances.

Means Test

A recent reform of the bankruptcy laws made a means test mandatory for Chapter 7 bankruptcy filers. You must add together certain monthly income, including alimony and/or child support, to calculate whether that amount is above or below the median income for a household of your size in your state. If your income is above that mean income level, then you will not qualify for a Chapter 7; you must file a Chapter 13 petition.

Get a free, confidential bankruptcy evaluation. Learn More

Chapter 13 Plan

It is not necessary to qualify through a means test for a Chapter 13 bankruptcy. If you file a Chapter 13 petition, however, the court-appointed trustee will set up monthly payments to creditors. The amount depends on your income, including any alimony payments. The bankruptcy does not affect your right to receive court-ordered alimony, nor does it change the amount you should receive. Chapter 13 payments do not come directly from any specific source; they are calculated as a percentage of your total income.

Deemed Alimony

Although you receive court ordered alimony, you may not be allowed to keep it in a Chapter 7. Federal bankruptcy courts reserve the right to determine what is actually alimony in a marital settlement. If you receive a support payment in the form of nonexempt property, or cash in lieu of property, that support may be subject to seizure by the trustee. There are several factors that indicate the payment is likely to be deemed alimony by a bankruptcy court: if the support payment is taxable to you as the recipient; if it can be modified; if it ends at death or remarriage; and if it actually goes to the support of you and your dependents. This is a complex area of the bankruptcy code, and the advice of someone experienced in this area of the law may be helpful.

Get a free, confidential bankruptcy evaluation. Learn More
Bankruptcy Exemption Requirements


Related articles

Can a Bankruptcy Court Take Your Injury Settlement?

If you are on the verge of filing for bankruptcy because you lost your job due to an injury, you may find yourself in bankruptcy court seeking protection from your creditors and in state court pursuing a personal injury claim. You must work with your attorneys carefully, and disclose any personal injury claims to the bankruptcy trustee or you may not be able to recover any money for your injuries.

Can Creditors Attempt to Get Money After a Discharge?

When you file a petition for bankruptcy, you are asking a federal court for protection from creditors and time to work out your financial difficulties. In a Chapter 7 case, the court authorizes a trustee to seize your assets and sell them in order to repay creditors. In a Chapter 13, the trustee sets up a repayment plan, taking into consideration your assets as well as your income. Unless the case is dismissed, both kinds of bankruptcy conclude with a cancellation of debts you owe to some — but not all — of your creditors.

Rules for Declaring Bankruptcy in Kansas

When a Kansas resident wants a clean financial slate, he may file for bankruptcy protection under Chapter 7 or Chapter 13. Both are forms of individual bankruptcy structured under the federal Bankruptcy Code, but Kansas cases are subject to Kansas’ exemption list and median income level. If you successfully complete your bankruptcy case, you may receive a discharge of your remaining unpaid debts.

Related articles

What Happens if You Are in Bankruptcy and Win the Lotto?

Declaring bankruptcy means asking a federal court for protection from creditors. You begin the case by filing a ...

Schedule F Bankruptcy Discharge

Bankruptcy means a fresh start – a court order protects you from collections and lawsuits, and eventually, the court ...

Can You Go to Jail if You Get Denied a Bankruptcy Discharge?

A bankruptcy court's discharge releases you from the debts included in it. Federal and state laws don't allow you to ...

Are Personal Injury Payments Considered Income for the Bankruptcy Means Test?

When federal lawmakers rewrote the bankruptcy law in 2005, they set up a means test for debtors filing for Chapter 7 ...

Browse by category
Ready to Begin? GET STARTED