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A:
When Congress revamped the bankruptcy laws in 2005, one of the many things they did was try to protect the rights of divorced (or soon-to-be-divorced) people. One of the things they did was clarify the definition of debts that were incurred by a debtor for the support of another. This they did by creating the term “Domestic Support Obligation” or DSO.
In essence, a DSO is a debt (including interest) that accrues before, on, or after the date a bankruptcy is filed that is in the nature of alimony, maintenance, or support. This debt can be owed to a spouse, former spouse, or child (or parent of said child). A DSO can be created by a:
DSOs are given quite a bit of priority under the bankruptcy code, often one of the first debts paid by a bankruptcy trustee. In addition, they are automatically non-dischargeable. This means that they cannot be wiped out in a chapter 7. They also must be paid in full in a chapter 13. For this reason, careful consideration needs to be given this type of debt when filing.
If you are in the midst of a New Jersey divorce, or soon will be, expect to be the payor or recipient of a domestic support obligation, and are looking for more information, please call my office at 888-857-8418 or contact me through this web site.
Getting divorced and thinking about bankruptcy? Is your spouse filing, and you are worried about what that might mean to your case? Then get the answers to the most frequently asked questions by downloading my free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy. It will give you the answers you need all in one place. Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.