March 23rd, 2010 by Reed Allmand 
When a divorced debtor files bankruptcy they are often facing a special set of circumstances that may impact how their bankruptcy proceeds. One of those special circumstances is the obligation to pay domestic support to a former spouse or child. For the purposes of bankruptcy, domestic support obligation is defined as money that must be paid to 1) a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative; or 2) a governmental unit like a state collection bureau.
Below are some real life examples of what a support obligation looks like.
- A debtor filed for divorce 1 year before filing bankruptcy. The divorce decree orders the debtor to pay his spouse $1,000 per month in alimony. This is a domestic support obligation.
- A debtor is sued by the state and ordered by the court to pay back child support. This is also a domestic support obligation.
- A debtor signs a contract with the grandparent of his/her child that says he/she will pay $500 a month if they care for the child. This is also a support obligation.
Support obligations cannot be discharged in bankruptcy. Under the bankruptcy code, support obligations are given priority even over taxes. But in order for a debt to be defined as a support obligation during bankruptcy it must arise from a legal agreement, a divorce decree or court order or some determination by a governmental unit.
The fact that support obligations cannot be discharged in bankruptcy is not necessarily a bad thing. Bankruptcy debtors with support obligations may be able to use their existing assets to pay their support obligations while discharging their other unsecured debts.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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