How Do Alimony and Child Support Exemptions Work?
Do you currently receive alimony from an ex-spouse, or child support payments from a former partner with whom you share a child? If so, and if you are planning to file for personal bankruptcy, it will be critical to discuss exemptions for family support with your West Palm Beach bankruptcy lawyer. In short, these payments may be exempt — meaning that they will not be subject to liquidation in a Chapter 7 case, or counted as assets for purposes of determining a debtor’s repayment plan terms in a Chapter 13 case. However, these payments may not be entirely exempt. It will depend how much you are receiving, and how much is “reasonably necessary for the support” of yourself and any dependents.
What do you need to know about exempting alimony and child support in a Florida bankruptcy? Our South Florida bankruptcy lawyers can tell you more.
Family Support Payment Exemptions in Bankruptcy
Exemptions for alimony and child support in Florida bankruptcies are actually part of a federal exemption that the Florida Statutes permit a debtor to use in their individual bankruptcy case. Under Section 222.201 of the Florida Statutes, a debtor can apply federal exemptions listed in subsection 522(d)(10) of US bankruptcy law. Subsection 522(d)(10)(D) expressly states that a debtor can exempt “alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.”
As you can see, there is no specific dollar amount. Instead, the court will need to determine what amount of support — whether it is alimony, child support, or a combination — that is “reasonably necessary” for your support and/or the support of your dependent(s) to identify the amount that is exempt. The amount “reasonably necessary” typically means the amount needed to provide for yours and your dependent’s needs, taking into account your other assets and income.
Non-Dischargeability of Family Support Obligations
It is essential to know that while payments received for family support obligations may be exempt in a personal bankruptcy case, debt owed for family support will never be dischargeable in a bankruptcy case. Accordingly, if you are planning to file for bankruptcy and owe debt for alimony or child support, this type of debt is one of the clear exceptions to the discharge under the US Bankruptcy Code.
In sum, you may be able to keep money you have received as alimony or as part of a child support obligation, but you cannot discharge debt for alimony or child support if you owe it.
Contact Our West Palm Beach Bankruptcy Attorneys for Assistance
If you are currently receiving alimony, child support, or any other type of family support, you should discuss exempting these payments with a bankruptcy attorney if you are planning to file for personal bankruptcy in Florida. You may be able to exempt the full amount, but it will depend on the amount you receive and your specific financial circumstances. One of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller can speak with you today to discuss your circumstances. Contact us for additional information and assistance.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.201.html
law.cornell.edu/uscode/text/11/522
