Post-Divorce Support and Bankruptcy Laws: How it Makes Sense
Utah bankruptcy law practices are no strangers to customers going through divorce. To the clueless individual, there seems to be no connection between Chapter 13 Bankruptcy law and separation. But on closer inspection, bankruptcy laws might just be your saving grace.
One of the most common reasons divorced couples consult with bankruptcy lawyers is their alimony: they are far behind or too caught up. In some cases, the Utah Office of Recovery Services isn’t too forgiving, garnishing 25% from paychecks to deal with support arrangements.
Fortunately, the Utah bankruptcy toolbox has remedies for divorce-related obligations.
According to Utah Bankruptcy Pros, a bankruptcy lawyer, the bankruptcy law encompasses a wide spectrum of financial areas. In the case of divorce, the bankruptcy code has its say. Under its ruling, Chapter 7 and Chapter 13 bankruptcies do not discharge court-ordered domestic support obligations, which include alimony and child support.
Since recipients of these maintenance obligations depend on child support and alimony for their finances, bankruptcy laws do not always have their backs. But this does not mean it’s not a helpful tool when it comes to dealing with such obligations.
How Chapter 13 Bankruptcy Helps
If you lagged behind your child support and other alimony payments, Chapter 13 is your best bet. While domestic support arrangements cannot be discharged under a Chapter 13 Bankruptcy, some arrangements can make it through Chapter 13’s plan.
Child support and alimony arrears paid through this plan use the expense of other creditors and also spread out over a three to five year range. This pay-back tool for domestic support obligation arrears is helpful for clients with paychecks garnished by the Utah Office of Recovery Services.
How Chapter 7 Helps
Some divorced individuals do not have enough income to pay for their debts, let alone their alimony or child support payments. In such case, Chapter 7 bankruptcy removes ordinary debts, freeing up money for support payments.
Those behind their support payments also benefit from Chapter 7’s help. Trustees can collect money to pay down non-dischargeable alimony, child support, and other domestic support arrearages.
To learn more about how the bankruptcy laws can help you divorce-related issues, get in touch with a bankruptcy lawyer today.