My ex-husband pays me both alimony and child support payments each month—will this be counted as income if I file for bankruptcy here in Arizona?

As you prepare to file for bankruptcy, you will be jumping through many proverbial “hoops” to ultimately get your debts discharged. One of the earliest “hoops” to jump through is the means test for the particular bankruptcy that you are filing for.

 

The means test looks at six-month average of your income and expenses to determine whether your disposable monthly income is sufficient to support a Chapter 13-syle repayment plan, or if you are better suited for a Chapter 7 liquidation bankruptcy. By comparing your income and expenses to other households of your size in Arizona, you will be able to find out which bankruptcy you can file.

 

As you fill out the means test, your received alimony and child support payments will need to be counted as income. This is important, as the amount you receive in support payments (combined with any income from your job) can impact whether you qualify for a Chapter 7 bankruptcy, especially if this amount pushes your income about the state mean for a household of your size.

 

The good news is, however, that most child support payments are exempt, which means that the bankruptcy trustee cannot use any portion of these payments to pay off your creditors. This may help set your mind at ease as you navigate through your bankruptcy case, knowing that funds meant for your child or children will remain safe and secure.

 

Whether your combined income qualifies you for a Chapter 7 bankruptcy or you are financially secure enough to file for a Chapter 13 bankruptcy, our Phoenix, AZ bankruptcy law firm can help. The Arizona consumer bankruptcy attorneys at Curry, Pearson & Wooten can help you escape the overwhelming burden of your debt and help you protect the important funds that are meant to provide for your children. If you are considering filing, let us guide you through the process—call us today at 602-258-1000 to schedule a consultation with a lawyer now.