Divorces that will include alimony are often complex, but knowing a few points about these spousal support payments might help individuals who are considering asking for them make a decision about what to do. Because the tax laws related to alimony changed at the beginning of 2019, there are some individuals who might have to rethink what they are going to do.
Under the old tax law, alimony payments were considered income for the payee, and they were tax exempt for the payer. This changed so you no longer need to consider that aspect of these payments, but there are other things that you should consider.
The way that alimony is paid to you is one of these. Regularly occurring payments are how many of these situations are handled. Others choose to make one lump sum payment. You also have to be careful of how alimony payments to you are classified. They can be classified as alimony, but they are sometimes considered part of the property division settlement.
If your ex files bankruptcy, they can have property division payments discharged during the bankruptcy. They can't have alimony payments discharged though. If they fail to make the payments to you as stated in the order, their wages can be garnished. With property division, the garnishment is up to 25 percent of the wages. This increases to 50 percent if the payment is alimony.
It is best to review all of the options available for these support payments when they are appropriate. This gives both sides a chance to look at how they might affect their situations. Consulting with your legal representation is a good idea.