A new court opinion issued by the 8th Circuit Court of Appeals declares that alimony is part of the bankruptcy estate and can be liquidated by the Chapter 7 Trustee unless a specific state exemption protecting the alimony award exists. In re Mehlhaff, 2013 Bankr. LEXIS 944 (Bankr. D.S.D., Mar. 12, 2013).
Prior to filing bankruptcy in 2012, Laura Mehlhaff received an award of $200 per month alimony until her minor child reached age eighteen in 2014. The opinion does not state whether the alimony would terminate upon the death of Laura or her ex-husband or upon the remarriage of Laura, but most alimony awards terminate upon the occurrence of either event. However, it appears that South Dakota law provides that alimony is a property right and the Supreme Court of South Dakota in another case allowed a creditor to place a lien against an award of alimony.
if alimony is the kind of property right to which a lien can attach, it is the kind of property right that becomes property of the estate when a bankruptcy is filed. In re Mehlhaff.