There is as much as $33 billion in annual child support payments that are exchanged in the U.S. every year. That amount is only about half of what existing court orders dictate should be paid annually. Some parents likely struggle to afford their payments. These same individuals may find it challenging to pay their alimony obligations as well.
Consequences exist for those who don’t make timely child support or alimony payments. Someone who gets behind can, at the very least, face a contempt of court hearing.
The penalties for not paying child support can be particularly severe. It may result in garnishment of wages, license suspension and jail time. Many parents facing these realities look to debt relief options to see if they might help them avoid paying these monthly obligations.
If you’ve read our previous blog posts about debts that aren’t dischargeable in bankruptcy, then you’re likely aware that child support and alimony are two payment obligations that are not. There’s been little discussion about why that’s the case, though.
What makes child support and alimony non-dischargeable debts?
All debts classified as domestic support obligations (DSOs) are non-dischargeable in bankruptcy. These obligations to pay can’t be discharged because they are court ordered under state law instead of the bankruptcy codes. This prevents parents or former spouses from shirking their obligations via bankruptcy. This same logic also applies to those who take on student loans.
Are property settlement agreements dischargeable in bankruptcy?
If child support and alimony aren’t dischargeable in bankruptcy, then you might wonder if property settlement agreements are. While Chapter 7 bankruptcy may not allow you to discharge these obligations, Chapter 13 might. You may be able to make other arrangements through the Chapter 13 process.
Are there any other options for debt relief if I have DSO obligations?
While you might not be able to eliminate your obligation to pay child support, alimony or to turn over property by filing bankruptcy, the debt relief you can get by having other debts eliminated may allow you to better cover your DSO debts. A bankruptcy law attorney can expound on why that’s the case.