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May I discharge alimony payments?
Alimony payments are generally
not dischargeable in bankruptcy proceedings. However, a question
occasionallly arises over the nature of a particular award - is it alimony,
or is it a property settlement? The distinction is important, because
a property settlement may be dischargeable in bankruptcy proceedings.
The fundamental inquiry then becomes whether the intent of the divorce
court and the ex-spouses was to provide support or divide marital property.
In determining whether a debt is in the nature of support/maintenance or
whether it is properly characterized as a division of property, courts
have considered the following factors:
- whether the obligation terminates upon the death or remarriage of either spouse (termination of the obligation indicates the obligation was for support);
- whether the obligation is payable in a lump sum or in installments over a period of time (obligation spread over time indicates the obligation was for support);
- whether the payments attempt to balance the parties income (payments to balance income indicate the payments were for support);
- the characterization of the obligation in the divorce decree (obligations described as support indicate the obligation was for support);
- the placement of the obligation in the decree (obligations under the heading support indicate the obligation was for support);
- whether there is any mention of support payments (separate mention of support payments indicates the obligation is not for support);
- whether there are children who need support (if children are of the age when support is required, this indicates the payments may be for support);
- whether there is a large differential in net income (a large differential in income would indicate the payments were for support);
- whether the obligation was thought to be taxable to the recipient (payments thought to be taxable indicate the payments were for support); and
- waivers of maintenance.
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