Given the current state of the economy and the rise in health care costs, many people in New Mexico and elsewhere are either planning to or are in the process of filing for bankruptcy. If you’re recently divorced, your finances might have taken a hit as a result, and you might be among the people considering bankruptcy. Here is what you need to know when it comes to spousal and child support and your bankruptcy case.
Child support and spousal support cannot be discharged
When a person files for bankruptcy, he or she submits a petition that lists all the debts owed and asks the court to discharge or organize a repayment plan for them. Once the court discharges a debt, creditors can’t collect on it anymore. However, not all debts are eligible for discharge under current bankruptcy laws, which means these debts are not affected by the bankruptcy filing. Two such debts are spousal support/alimony and child support.
The bankruptcy codes take the responsibility to support your family very seriously, which is why neither of these debts can be discharged. Part of the reason behind this specific protection is that both spouses and children are often left in a shaky financial situation post-divorce, and they are not like other creditors, such as credit card companies, who assume some risk any time they lend money. On top of that, children and former spouses may rely on that support for their daily survival, and without that support, the government would have to step in and offer aid through programs such as Medicaid, TANF and the Supplemental Nutrition Assistance Program.
You may be able to get support changed
If there has been a change in your circumstances that makes it very difficult for you to pay the current amount of support you’re supposed to pay, you may be able to get it modified if the new support amount would be at least 20 percent less than what you’re currently paying. Events that impact your income and ability to earn a wage, such as job loss or a serious medical illness, are usually factors in child support changes. However, the court will not automatically change your support even if you’ve experienced a qualifying event, and you have to continue paying the amount you’re supposed to until you have it changed by the court.
You can file the request for a modification through the New Mexico Office of Child Support Enforcement if you have a child support case open and active through there. If both you and your spouse agree to the new amount, you may be able to have it changed without going into court. If not, the judge will decide whether modification is necessary.
If you’re paying child and spousal support based on a divorce decree or other court judgment, you can change the agreement by filing it in court if you have the agreement of your ex-spouse. If you don’t, you’ll need to ask the court to change the original order.
When preparing to ask for a modification, you’ll need to get all your financial documents together, including proof of income, assets and your past tax returns. Get documentation of your circumstance change, such as a termination letter from your employer or medical bills.
Getting child support changed on your own can be a bit difficult, so you might want to consider a family law attorney. The sooner you get your modification request in, the better, so don’t wait to act. Modifications are generally not retroactive, so the longer you put it off, the more you may end up paying that you can’t afford.