What Happens to My Alimony Agreement if My Former Spouse Files for Bankruptcy?

gavel and money

If you were financially dependent on your spouse during your marriage, the Illinois court may order alimony as a post-divorce financial obligation. These regular payments that you will receive from your former spouse will allow you to maintain the standard of living that you established during your marriage. However, you may be wondering how this financial agreement will alter, if at all, in the chance that your former spouse files for bankruptcy. Read more to learn how these payments may be affected and how a seasoned Tazewell County alimony lawyer at Butler, Giraudo & Meister, P.C., can help you protect your agreement. 

Will my former spouse need to continue alimony payments when they file for bankruptcy?

Rest assured, filing for bankruptcy does not automatically put a halt to alimony payments. In fact, in regards to bankruptcy, there are two types of debt considered. They read as follows:

  • Dischargeable debt: debt, such as that of credit, that will most likely be wiped out when filing for bankruptcy.
  • Non-dischargeable debt: debt, such as that of domestic support obligations, that will most likely remain when filing for bankruptcy.

With that being said, alimony debts will be non-dischargeable when filing for Chapter 7 bankruptcy. It will be considered a priority debt, included in the monthly payment plan and paid throughout and after the bankruptcy proceedings, when filing for Chapter 13 bankruptcy. 

Can my former spouse modify their alimony payments during their bankruptcy?

Even though alimony debts are not eliminated during the bankruptcy process, your spouse may still have the opportunity to petition for a modification of their support obligation. They can use the following arguments for a post-judgment modification that better reflects their current financial status:

  • Your former spouse lost their job due to no fault of their own.
  • Your former spouse is earning less money than at the time the agreement was reached.
  • Your former spouse developed a serious medical condition that came with serious medical bills.
  • You remarried, which makes you financially independent. 
  • You came into an inheritance, which makes you financially independent. 

However, to counter these arguments, you can use the following defenses:

  • Your former spouse is unemployed because they willingly quit their job.
  • Your former spouse is unemployed because they were fired for negligence or criminal misbehavior. 
  • Your former spouse is earning less than at the time the agreement was reached because they willingly switched to a lesser-paying job. 

If you have any further questions regarding the status of your alimony payments, do not hesitate in reaching out to a knowledgeable Tazewell County post judgment modification lawyer today.

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Contact Butler, Giraudo & Meister, P.C., today for effective and compassionate legal counsel for the following legal matters: divorce, alimony, division of marital assets, child custody, and child support.

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