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Bankruptcy May Be Your Option

What happens to spousal support in a bankruptcy?

Filing for bankruptcy might be the best solution for someone facing financial challenges and wants to get a fresh start, but bankruptcy is a complex area of the law. For the person seeking debt relief who has been ordered to pay spousal support by an Oklahoma court, consideration must be given to the special rules that apply to such obligations.

Changes to the bankruptcy laws went into effect almost a decade ago to make child support and spousal support obligations a higher priority than they had been previously. This means that a Chapter 7 or a Chapter 13 bankruptcy will generally not result in the elimination of debt attributable to support obligations.

This does not mean that a consumer bankruptcy cannot be of assistance in overcoming financial challenges even an individual who has defaulted in paying spousal support. For example, filing for bankruptcy usually puts a hold on debt collection by creditors except for attempts to collect for support obligations owed by the debtor. Although such collection efforts can continue, this may not be the case in a Chapter 13.

A Tulsa bankruptcy court may prevent collection of spousal support and child support from someone’s earnings if the Chapter 13 plan is based on payment coming from those earnings. The court will usually do this only if the repayment plan includes an adequate amount going toward the debtor’s support obligations.

A Chapter 13 may present an opportunity for a consumer to achieve debt relief, but a person in need of information pertaining to the elimination of specific types of debts, such as spousal support, should seek legal advice from a bankruptcy attorney. This post an overview of bankruptcy, but it is not offered, nor should it be relied upon, as legal advice by someone considering filing for bankruptcy.

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