Bankruptcy Won’t Stop Child Support or Alimony After Bartlett TN Divorce
Your Bartlett, TN, divorce was just finalized, the property was equitably distributed, alimony was awarded, and child support ordered. Everything “financial” is going great until you receive notice that your former spouse has filed for bankruptcy.
OMG… My Ex Is Bankrupt!
Bankruptcy Won’t Stop Child Support or Alimony After Bartlett TN Divorce
There are a few basic bankruptcy principles worth knowing. One is how our U.S. Bankruptcy Courts handle creditors owed child support or alimony in any of these three personal bankruptcy cases:
● Chapter 7 (Liquidation)
● Chapter 11 (Reorganization)
● Chapter 13 (Individual Debt Adjustment)
On the one hand, if you are on the receiving end of alimony payments or child support from the bankrupt debtor (the one who filed for relief under Chapter 7, 11, or 13), then you are a special kind of unsecured creditor with important rights to protect. Consider hiring your own creditor’s rights bankruptcy attorney.
On the other hand, if you were ordered to pay support for a former spouse or minor child in the Tennessee divorce, filing for bankruptcy will not provide an escape valve from those support obligations. (Chapter 13 may, however, provide some relief from additional penalties and interest on support arrears.) There is nothing to prevent a party from seeking a child support modification or alimony modification in state court, but that is not something to be accomplished through bankruptcy.
Nevertheless, parents should seek competent legal advice and bankruptcy court representation. In order to ensure that your rights are protected, proper paperwork may need to be filed. Also, you may need to make sure that the person seeking bankruptcy protection has filed accurate information.
Child Support and Alimony Are Protected in Bankruptcy
Under the U.S. Bankruptcy Code, certain creditors’ claims are known as domestic support obligations (DSOs) when intended to pay for a person’s basic needs and maintenance. 11 USC § 101(14A).
Clearly, DSOs include amounts ordered under Tennessee law for the payment of child support and spousal support. It’s very important that parents and former spouses understand the federal court’s treatment of DSOs so they can enforce their rights as support creditors in the bankruptcy proceedings.
When the Bankruptcy Abuse Prevention and Consumer Bankruptcy Protection Act of 2005 went into effect, the U.S. Bankruptcy Code was amended to better protect domestic support creditors: those receiving financial support under a separation agreement or support order issued in a Tennessee divorce, legal separation, or child custody case. These special creditors include current and former spouses, unmarried parents of minor children, legal guardians, adult relatives responsible for minor children, and the governmental units that collect child support, including Tennessee’s Dept. of Human Services.
DSOs are nondischargeable debts in bankruptcy! Furthermore, it makes no difference whether the child support or alimony accrued before or after the bankruptcy petition was filed; the DSO is not a debt that can be eliminated through bankruptcy. 11 U.S.C. § 523(a)(5,15).
Tennessee’s U.S. Bankruptcy Courts
Generally, the debtor’s residence determines where a bankruptcy petition is filed, not the location of his or her creditors. After all, the creditors are likely to be numerous and scattered all over the country. If the debtor lives in or near Bartlett, then the U.S. Bankruptcy Court, Western District of Tennessee is nearest with two divisions: the Western Division is in Memphis and the Eastern Division is in Jackson. (If the debtor lives elsewhere in Tennessee, then he or she may have filed bankruptcy in the Middle District or Eastern District.)
Regardless of where the petition is filed, even if out-of-state, be assured that domestic support obligations are nondischargeable debts in bankruptcy.
Caring Memphis TN Divorce Team
No matter how challenging the circumstances, you need a trusted team of passionate, caring legal professionals to guide you through the Tennessee divorce process. Memphis divorce attorney Miles Mason, Sr., practices family law exclusively and is founder of the Miles Mason Family Law Group, PLC. To schedule your confidential consultation, call us today at (901) 683-1850.
Are you looking for a handy divorce resource to get started? Check out The Tennessee Divorce Client’s Handbook: What Every Divorcing Spouse Needs to Know now available on Amazon and Kindle.
