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In bankruptcy, court-ordered payments such as alimony and child support are treated differently from most other debts. They are non-dischargeable debts. This means you cannot eliminate your obligation to pay them. However, your bankruptcy lawyer should still know if you pay alimony, because it may help you with regard to the type of bankruptcy you file.

In order to file for Chapter 7 bankruptcy, your income must be below a certain threshold. If your income is above that threshold, your bankruptcy lawyer can deduct your actual expenses for court-ordered obligations, including child support and spousal support. You’ll also be allowed to deduct living expenses based on the local standards. These deductions might put you under the threshold, allowing you to file for Chapter 7 bankruptcy.

The seasoned bankruptcy attorneys at Cutler & Associates, Ltd. provide comprehensive legal counseling to our clients in Schaumburg and the Chicagoland area.