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Tag Archives: child support

Potential income and child support

Posted on May 31, 2017 by Elizabeth Rosar Chermack

In order to calculate the amount of child support that should be ordered in Minnesota, the amount of each parent’s gross monthly income needs to be determined.

Sometimes it is easy to determine each parent’s income for child support purposes. For example, when a parent earns a regular salary each month as a W-2 employee, there aren’t a lot of questions about the amount of their income.

What if a parent is not employed OR what if a parent is voluntarily underemployed?

In Minnesota there is a rebuttable presumption that a parent can be gainfully employed on a full-time basis. See Minn. Stat. §518A.32 subd. 1.

If a parent is unemployed or voluntarily underemployed, then child support is typically calculated on the basis of potential income. See Minn. Stat. §518A.32 subd. 1.

How is potential income calculated? (1) Based on the parent’s probable earnings; (2) The actual amount of unemployment compensation or workers’ compensation benefit received; or (3) the amount they would earn by working 30 hours per week at a job that pays minimum wage. See Minn. Stat. §518A.32 subd. 2.

 

Elizabeth Rosar Chermack is a lawyer who practices family law in Minnesota, and can represent you in your child support case.   Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with her.

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Posted in Family Law | Tags: child support |

How Does Bankruptcy Affect Divorce-Related Debts?

Posted on March 12, 2010 by Elizabeth Rosar Chermack

If you or your spouse may file bankruptcy after you divorce, it is important to know how bankruptcy affects some common issues in divorces.

Prior to 2005, a debtor who was able to show an inability to pay for property settlement debts was able to have those debts discharged in a bankruptcy. This is no longer the case, and thus every type of obligation to a spouse, former spouse, or child of the debtor is non-dischargeable. See 11 U.S.C. §523(a)(5). See also 11 U.S.C. §523(a)(15).

This means that child support obligations, spousal maintenance (alimony), and property settlements are generally non-dischargeable in bankruptcy.

From a practical standpoint, though, as I discussed in my previous post, one spouse may still be “on the hook” for a debt that the other spouse is obligated to pay under the property settlement of the divorce decree. If the debt is in both spouses’ names, but the husband is obligated to pay for it under the divorce decree, if the husband doesn’t pay it, the wife will still have to answer to the creditors. Thus, if the husband is not paying the debt that he is obligated to pay under the divorce decree, and it is negatively affecting the wife’s credit, the wife may either need to pay that debt herself or file bankruptcy in order to begin to rebuild her credit. The wife may also have a cause of action for contempt against her husband.

Marital liens in real estate become property of the bankruptcy estate, because the bankruptcy code provides that “all legal or equitable interests of the debtor in property as of the commencement of the case” are property of the bankruptcy estate. See 11 U.S.C. §541(a)(1).  This means that the trustee in a Chapter 7 bankruptcy case will often try to sell the marital lien interest. These liens may be sold at a discount. Thus, the debtor may be able to buy it back from the trustee.

In a Chapter 13 bankruptcy, a debtor must pay all amounts that he or she is required to pay under a domestic support obligation. Such obligations become due and payable after the petition is filed, and failure to make those payments is grounds for dismissal or conversion of the case. See 11 U.S.C. §1307(c)(11).

 

In order for a Chapter 13 plan to be confirmed, a debtor’s plan must provide for full payment of domestic support payments. This is because domestic support payments are a priority claim. See 11 U.S.C. §507(a)(1)(B). A Chapter 13 plan that does not provide for full payment of this priority claim is only allowed “if the plan provides that all of the debtor’s projected disposable income for a 5-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan.” See 11 U.S.C. §1322(a)(4).

In conclusion, bankruptcy generally does not have a huge impact on divorce-related debts, because of the protections provided by the bankruptcy code for spouses, former spouses, and children of the debtor.

Posted in Bankruptcy Law | Tags: alimony, bankruptcy and divorce, Chapter 13 bankruptcy, Chapter 7 Bankruptcy, child support, divorce, marital lien, property settlement, spousal maintenance | Leave a comment |

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© Elizabeth Rosar Chermack, Attorney at Law. Disclaimer: The content of this website is provided for informational purposes only. Information you obtain from this website is not, nor is it intended to be, legal advice. You should consult an attorney for individualized advice. Use of this website does not create an attorney-client relationship. Elizabeth Rosar Chermack, Attorney at Law, is a designated debt relief agency by an Act of Congress and the President of the United States. She assists consumers seeking relief under the U.S. Bankruptcy Code.