Call Us: 1-877-290-9197

Call Us: 1-877-290-9197

Alimony, child support and equitable distribution

Bankruptcy Now - Alimony, child support and equitable distribution
After a couple have a child, whether they are married or not, there is a financial responsibility that comes with that event.  If the couple separate or divorce, and there is a court proceeding in the family court, if there was a marriage, there may possibly be alimony  and equitable distribution awarded.  Alimony puts the spouse with less ability to make income on relatively equal footing as the spouse who has the ability to make more income.

Equitable distribution is a process where the court fairly distributes the property acquired during the marriage.  Child support is almost always awarded to the former spouse who has greater need and the amount is determined by Florida Statutes Section 61 based on the need of the other former spouse.

If you get behind on child support or alimony, you may have severe problems with the court.  If the family court finds you are behind on your payments, and that you have the current ability to pay, there are a number of things the family court can do.  The main thing the court can do is put the non-paying former spouse in jail for contempt of court for a specific term.  After that term, if the child support or alimony has not been paid, the court will have another hearing.  If at that hearing, the former spouse still refuses to pay the child support or alimony, the family court judge can have you placed in jail again.  This will continue until the court finds that you don’t have the ability to pay or you pay the amount directed to be paid by the court.  If you are paying child support into the court registry for the benefit of the child or children, the Florida Department of Revenue can suspend your driver’s license or passport.  If you get arrested for driving without a license, that is another criminal issue the former spouse will have to deal with. 

If a Chapter 7 bankruptcy is filed, the former spouse will derive no benefit from that bankruptcy filing.  Neither child support, alimony or equitable distribution is dischargeable in a Chapter 7 bankruptcy.  However, there are significant benefits in a Chapter 13 bankruptcy filing.  First, if you are in jail, you must be released, unless you are there on criminal contempt charges.  There is a difference between criminal contempt and civil contempt charges.  If you are in jail for criminal contempt, you are there to be punished by the court for willful violation of court orders.  If you are in jail for civil contempt, you are there to persuade you to comply with the family court orders.  A determination of whether you were incarcerated because of criminal or civil contempt may be required by the bankruptcy court.  There will be a hearing, and based on the pleadings, if the former spouse’s lawyer asked that you be placed under the custody of the state because of criminal contempt or the family court judge puts in the order having you incarcerated that it was for criminal contempt, the bankruptcy court has no authority to overrule the family court.  If there is no mention of criminal contempt, the bankruptcy court can still find that you were incarcerated for criminal contempt.  If, for example, you had the ability to pay the back child support or alimony, and the family court was forced to put you back in jail for your refusal to pay, you are probably there for criminal contempt.  Your state court counsel would have to file an emergency hearing saying that you are now in bankruptcy and intend to repay the back child support or alimony.  You will probably be released from jail after that hearing.  However, those issues are very rare.  Most of the time, the former spouse has not gone to the hearing where the family court first finds you in contempt before you see a bankruptcy attorney.  If a Chapter 13 bankruptcy is filed before that hearing, the hearing will not be held, but you must make the back child support and/or alimony payments through the Chapter 13 bankruptcy plan.  Once this is done, it is unlikely that you will have any further trouble in the family court.  But you do need to stay current in your Chapter 13 plan payments or you will be back where you started in the family court. 

Although equitable distribution is non-dischargeable in a Chapter 7 bankruptcy, it is dischargeable in a Chapter 13 bankruptcy.  A determination must be made that the debt is actually equitable distribution.  Sometimes in family court, the alimony, which is taxable, is reduced, and the equitable distribution, which is not taxable, is increased.  That would make some of what the property settlement agreement different from what it says.  If it says equitable distribution , it may actually be alimony, and non-dischargeable.  Usually the bankruptcy attorney and the family law attorney can work out the actual amount of equitable distribution that is dischargeable.  But if that cannot be worked out, we can go to mediation before a former bankruptcy judge, or have a hearing before the bankruptcy court to determine how much of the equitable distribution is dischargeable.  This is a very fast process.  It’s not like the process in the family court.  Depending on discovery and the mediation process, it should take as little as six months to go to trial on this issue if it can’t be worked out.  Because of the speed, the attorney fees are much less than the family lawyer’s fees.  The costs are minimal as well.

The bottom line is that if you are behind on child support or alimony or have equitable distribution issues, filing a Chapter 13 bankruptcy may be the best option you have.  It will certainly be less expensive, and the outcome will never mean jail time.   If you are behind on child support, alimony or equitable distribution, ask a qualified bankruptcy attorney about your options.