Receiving spousal support that is exempt from garnishment

[ColoradoBell]

In my state, spousal support (receiving it, not paying it) is exempt from garnishment by creditors.

If I've always kept this in a separate bank account, then can the bankrputcy trustee take any of this money to pay my creditors?

How many months of bank statements from the date of filing must you usually provide to the trustee?

And if the money in my account is 'exempt' then am I free to spend it as I wish or do I have to spend it only on essentials (In a Chapter 7) ?

Does the trustee even look at credit card accounts IF those accounts are paid up in full at the time of filing?

[newbie2]

In my state, spousal support (receiving it, not paying it) is exempt from garnishment by creditors.

If I've always kept this in a separate bank account, then can the bankrputcy trustee take any of this money to pay my creditors?

How many months of bank statements from the date of filing must you usually provide to the trustee?

And if the money in my account is 'exempt' then am I free to spend it as I wish or do I have to spend it only on essentials (In a Chapter 7) ?

Does the trustee even look at credit card accounts IF those accounts are paid up in full at the time of filing?

I'm not an expert but I believe there can be a difference in how state laws & BK courts treat exempt monies. For example, your state may fully exempt your spousal support from garnishment, but that may not mean that the BK court doesn't see a surplus of funds available to them.

If you go to your states BK courts website it should have a breakdown there of the exemptions that you are allowed for cash on hand, and generally they also have filing requirements (number of bank statements, paystubs, IRS returns, etc.)

[helpmeout]

I just looked up Colorado's exemptions. You are not allowed to use Federal. The only type of support that is exempt is child support but I would consult with an attorney first and find out for sure. If it isn't exempt, you may want to spend down that money on necessities before you file.

[ColoradoBell]

no, the exemption for spousal support is in the statutes...it is definitely exempt from garnishment and I've used that twice now to prevent garnishment.

Of course it may be true that the BK trustee can decide that if I have left over money at the end of the month, that this money could be used to pay creditors.

Of course, it all stops in July and then I will have nuttin honey!

[newbie2]

no, the exemption for spousal support is in the statutes...it is definitely exempt from garnishment and I've used that twice now to prevent garnishment.

Of course it may be true that the BK trustee can decide that if I have left over money at the end of the month, that this money could be used to pay creditors.

Of course, it all stops in July and then I will have nuttin honey!

Exempt from garnishment means if someone gets a judgement against you in a civil case they cannot garnish your alimony.

Apples and oranges when it comes to bankruptcy rules. You'd better check with a bankruptcy attorney as to how the alimony is handled in a federal bankruptcy court setting.

[helpmeout]

no, the exemption for spousal support is in the statutes...it is definitely exempt from garnishment and I've used that twice now to prevent garnishment.

Of course it may be true that the BK trustee can decide that if I have left over money at the end of the month, that this money could be used to pay creditors.

Of course, it all stops in July and then I will have nuttin honey!

I'm in NJ where I can use the Federal Exemptions (fortunately as NJ is very stingy). The NJ exemptions for bankruptcy very specifically stated that spousal support and child support were exempt. As does the Federal Exemptions.

The only type of support that Colorado specifically stated as exempt to the Trustee is child support. Not one word was mentioned about spousal support.

Federal law trumps state law (but the federal exemptions also clearly state that you can only use the federal exemptions if permitted by the state), which is why spousal support can't be garnished. There's a federal law that prevents that. Don't confuse being exempt from garnishment as meaning being exempt in bankruptcy, they are separate issues. Consult with an attorney and find out how you can protect yourself.

[ColoradoBell]

Thanks for the clarification HelpMeOut! These things are very important, aren't they.
I found an excellent research tooll at the Colorado Bankruptcy web site...It allowed me to search Case Law opinions.

So I found a recent case where the trustee objected to alimony exemption and tried to say that alimony for the next 180 days from date of filing belonged to the estate...as property! The judge said ABSOLUTELY not....it is income and not property that can be taken by the trustee.

So I'm thinking that this might mean that in a chapter 7, future alimony payments can't be taken as property but maybe in a chapter 13 it can be counted as income for repayment.

Also, it didn't really speak to alimony sitting in your account on filing day...may be that CAN be taken, so I think I'll make sure that I have close to 0 on the day I file.

Thank you so much for the explanation!