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Can I Discharge a Divorce Settlement, Alimony etc? 7/27/2011

 Scenario: I just got a divorce and was awarded a property settlement, can my ex-spouse discharge that debt in bankruptcy? My ex-spouse just filed a chapter 7 bankruptcy, will my property settlement be discharged?  My ex-spouse was awarded that I pay attorney fees, can I discharge that debt in bankruptcy? 

It depends on what the award was for specifically.  Domestic support obligations are non-dischargeable in bankruptcy.  Meaning that if the debts awarded in the order are for the support of children or for alimony, your ex-spouse will not be able to eliminate that debt in bankruptcy.  If attorney’s fees are in the nature of a support obligation, then you cannot eliminate them in either a Chapter 7 or Chapter 13 bankruptcy.  However, if the attorney’s fees that were awarded are in the nature of property settlement, used to offset certain assets to you then you may be able to eliminate this debt in a Chapter 13 bankruptcy.  Chapter 13 bankruptcy can discharge the debtor’s obligation to pay a former spouse to equalize the division of marital property. This can be very crucial when a spouse is awarded the family home and ordered to pay the equity in the house at the time of the divorce.  Since the housing crisis where homes are no longer worth what is owed, having to pay the ex-spouse for equity that is no longer there can make it clear that the filing of a Chapter 13 bankruptcy is the best option.  Non-dischargeable support obligations or arrearages will be paid through a Chapter 13 plan and all arrearages cleared when the plan is completed. 

 

Contact a bankruptcy attorney or bankruptcy lawyer at Tiller Law today for your free consultation regarding your options. Serving Miami, Fort Lauderdale, Hollywood, Boca Raton, West Palm Beach, Palm Beach Gardens, Jupiter, Hobe Sound, Stuart, Port St. Lucie, St. Petersburg and Tampa and throughout the State of Florida.

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