In a Florida bankruptcy case stemming from a divorce, a husband’s lawyer argued that an alimony obligation was in part dischargeable by showing that it was not completely of a supportive nature. There are several kinds of alimony in the state of Florida, such as temporary, rehabilitative or lump sum. In this case, the alimony was labeled as rehabilitative. Rehabilitative alimony is usually intended to aid or help educate the person receiving it so they can increase their income to what it would have been had they not lost time and educational opportunities while helping their ex-spouse reach their career goals.
In general, alimony is considered to be for the support of another, making it non-dischargeable in bankruptcy under section 523(a)(5). As a result, family law attorneys will sometimes label what is actually a property settlement “alimony” so their client won’t have to worry about their ex-spouse discharging the debt. However, in the case of In re Harrell, the Judge found that an alimony award can be either supportive in nature or a property settlement and that it is the distinction between that those two that indicates the portion that can be discharged. In that case, only $500.00 of a monthly alimony obligation of $1,150.00 was found to be support and the remainder was discharged.
Many bankruptcy clients are mistakenly advised by their own family law attorneys who say that alimony is always a support obligation and that support obligations are non-dischargeable in bankruptcy. Although it is accurate to say that true “support obligations” are non-dischargeable, I would take a serious look at any alimony obligation before determining it to be untouchable in bankruptcy.
If you are considering bankruptcy and would like to speak to a bankruptcy attorney with family law experience who can look into your alimony obligations, call 904-685-1200 and schedule a free consultation today.