Can Spousal & Child support be gsrnished by a creditor?

[Quincunxes5]

Haven't seen this problem addressed if it has been, please excuse the repeat. My husband has decided he no longer wants to be married after almost 22 years of marriage, our finances are in a shambles & we need to file bankruptcy. I was told by a bankruptcy lawyer that we need to divorce first b4 we file, because we would have to file a chapter 13 instead of 7 which I dont see why, I have no income & my husband makes about 3500 per month. My problem is that after the divorce I wont have any health insurance due to the divorce, and if I stay married to him I will, as you can see this is a very big issue for me but I also need to file bankruptcy because of the financial mess we are in. My questions are, if I get spousal support and child support set up can the creditors get a judgment and garnish that? Will what my husband has left after they take out the child support and spousal support be counted as his income and the child support & spousal support I receive counted as my income since I dont work & havent in over 16 years due to our oldest child having cancer. I guess what it boils down to is if we are legally seperated & I have a court order for spousal & child support, how is that income reguarded in a bankruptcy court? Can two married but legally seperated people file bankruptcy and have their income considered seperate? Anyone with any answers please help. Thank you

[BKOnce]

Why on earth all BK situations eventually/ultimately/parallely/incidentally/... must lead to divorce situations... I dunno why either... !!!???

[JollyGG]

Haven't seen this problem addressed if it has been, please excuse the repeat. My husband has decided he no longer wants to be married after almost 22 years of marriage, our finances are in a shambles & we need to file bankruptcy. I was told by a bankruptcy lawyer that we need to divorce first b4 we file, because we would have to file a chapter 13 instead of 7 which I dont see why, I have no income & my husband makes about 3500 per month.

What state are you in?

My problem is that after the divorce I wont have any health insurance due to the divorce, and if I stay married to him I will, as you can see this is a very big issue for me but I also need to file bankruptcy because of the financial mess we are in. My questions are, if I get spousal support and child support set up can the creditors get a judgment and garnish that?

Hopefully, someone else will be able to answer this question.

Will what my husband has left after they take out the child support and spousal support be counted as his income and the child support & spousal support I receive counted as my income since I dont work & havent in over 16 years due to our oldest child having cancer.

Yes your support would be considered income. And yes the support he pays would be subtracted out on the means test.

I guess what it boils down to is if we are legally seperated & I have a court order for spousal & child support, how is that income reguarded in a bankruptcy court? Can two married but legally seperated people file bankruptcy and have their income considered seperate? Anyone with any answers please help. Thank you

Once again, hopefully someone else will have an answer to the question about seperated individuals.

[lrprn]

My husband has decided he no longer wants to be married after almost 22 years of marriage,

So sorry to hear about your awful situation, Q

I was told by a bankruptcy lawyer that we need to divorce first b4 we file, because we would have to file a chapter 13 instead of 7 which I dont see why, I have no income & my husband makes about 3500 per month.

Both divorce and bankruptcy lawyers say that in most circumstances, it's far better to divorce first, then file bankruptcy.

And about Ch 7 vs Ch 13....are there a home and cars you want to keep after you file bankruptcy, Q? Any other secured assets you want to keep?

If you file BEFORE the divorce, then chances are you will have to file together to wipe out all the debt for both of you. That means your husband's income matters if you file bk as a couple.

If your husband's gross income before taxes, insurance, etc are taken out is $3500/month, then his annual income is $42,000/year. If he works overtime, if either of you received large cash gifts, etc in the six months before you file, then that is added to this as well. We need to know which state you live in and how many kids or other adults living with you there are to sort out which bk chapter you might qualify for.

...if I get spousal support and child support set up can the creditors get a judgment and garnish that?

Your creditors can't touch your child support before or after you file bankruptcy because that money belongs to your children, not to you. But any other portion of your income that isn't protected by national or your state's laws could be fair game before you file bankruptcy. You'll have to ask an experienced divorce or bankruptcy attorney in your area if spousal support can be garnished by creditors before filing bankruptcy in your state.

Will what my husband has left after they take out the child support and spousal support be counted as his income and the child support & spousal support I receive counted as my income since I dont work & havent in over 16 years due to our oldest child having cancer.

Your husband's income will be calculated before taking out anything (his gross income), then required payments such as child support are removed later in the required Means Test.

If you file jointly before you divorce, the part of your husband's income that goes toward supporting your family is what is considered your "income" for the Means Test if you file by yourself. That's simplifying things a lot, so be sure to have your bankruptcy lawyer walk you through this if you decide to file on your own before you divorce.

I guess what it boils down to is if we are legally seperated & I have a court order for spousal & child support, how is that income reguarded in a bankruptcy court?

If you are still married and file jointly, then the child support will just be a part of his gross income. If you are still married and you decide to file on your own, then the child support counts into your gross income calculation.

Can two married but legally seperated people file bankruptcy and have their income considered seperate?

If there are debts that both of you are legally responsible to pay (a co-signed mortgage or car loan, for example), then if only one of you files, the other becomes responsible for paying the entire amount of that debt. That's why divorcing first is usually the best option. The divorce settles who is financially responsible for each of your current debts. That makes things much, much easier when you file bankruptcy.

Let us know which state you are filing in and how many dependents you have in the home currently - that will help us answer your questions more completely. Hang in there - we'll help you sort things out as much as we can.

[Quincunxes5]

Thx all, yes my life is a mess right now as you can see & I just dont know what to do, I really dont want to have to file a chapter 13. I am in the state of PA & the only debt we wanted to reaffirm is our car payment. We have 2 children at home 1 under the age of 18, Im lost & really honestly dont know where to turn.

[lrprn]

Thx all, yes my life is a mess right now as you can see & I just dont know what to do, I really dont want to have to file a chapter 13. I am in the state of PA & the only debt we wanted to reaffirm is our car payment. We have 2 children at home 1 under the age of 18, Im lost & really honestly dont know where to turn.

Let's see..... If you file jointly with your husband before divorcing, his $3500/month gross income x 12 = $42,000/year.

For a family of 4 in Pennsylvania, the new median income is $74,072 - you are well below that - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm . Filing Ch 7 should be possible.

Whether you can keep your car depends on how much equity you have in it when you file (what the car is worth vs. how much you owe on it). In PA, you can choose to use PA exemptions or the federal exemptions. PA bankruptcy exemptions show no exemption for a car - http://www.bankruptcyinformation.com/PA_exemp.htm . The federal exemptions allow $2,275 + $925 wild card + up to $8,725 if you don't need it to protect your home - http://www.bankruptcyinformation.com/exemp-fed.htm

Looks like the federal exemptions may be better for you. Keeping your car should not be a problem unless what it's worth minus what you owe on it is greater than $11,925.

Ask during your free initial consultation interviews with 3-4 bankruptcy lawyers in your area if PA is a state that does not allow repossession if you keep making your car payments on time. If it is, then you won't have to reaffirm the loan to keep the car as long as you keep making the payments on time. That way if you run into unexpected financial problems in the near future, you can walk away from the car not owing anything.

Hang in there. You are at the hardest place right now....realizing you need to file and trying to learn what's best in your situation. Keep asking questions - we'll help you as much we can.