Since July 1998, federal tax law has included ”innocent spouse” relief: if a taxpayer files a joint tax return but then divorces, legally separates, or lives apart from his or her spouse for one year, he or she might be able to limit or even avoid his or liability if he or she can prove that the other spouse caused the tax problems. An ”innocent spouse” must not have had any ”actual knowledge” of the former spouse’s tax violations. If you find yourself facing these problems, you may need to seek additional legal counsel.
Alimony and child support cannot be ”discharged” (forgiven) in bankruptcy. Furthermore, the U.S. Bankruptcy Code states that debts that are in the nature of support also cannot be discharged. In many states, courts will look to the intent of the spouses in deciding whether taking responsibility for marital debt is “in the nature of support.” The language of your settlement agreement and your intent at the time you entered into the agreement will be deciding factors as to whether you are able to discharge that debt. If it can be proven that you intended payment of the debt to help support your ex-spouse and children, you will most likely still be responsible for paying the debt despite going through bankruptcy. If you find yourself facing these problems, you may need to seek additional legal counsel.
