If you are paying for child support and considering filing for bankruptcy you may want to know how a bankruptcy will affect your child support responsibilities. On the other hand, if you are currently receiving child support, and the parent who is paying files bankruptcy, you may be wondering if they are still obligated to pay. Below is a general discussion of what happens to child support debt in a bankruptcy.
CHILD SUPPORT DEBT IN CHAPTER 7 BANKRUPTCY
Filing for Chapter 7 bankruptcy does not wipe out a parent’s obligation to pay child support. Additionally, Chapter 7 will not stop a legal proceeding to establish or collect child support.
- Chapter 7 Bankruptcy Does Not Stay Actions to Collect Child Support
When a person files for file Chapter 7 bankruptcy, the automatic stay immediately stops most creditors from coming after the person who filed (who is known as the Debtor) to collect their debts. Child support is an exception to the rule. This means that a parent who owes child support cannot escape this duty by filing for bankruptcy. The automatic stay does not prevent or delay a lawsuit to establish child support or collect back child support.
- Child Support Debt Is Not Discharged in a Chapter 7 Bankruptcy
In Chapter 7 bankruptcy, child support debt receives special treatment because it is considered a priority debt and is not discharged in bankruptcy. This means that unpaid child support (sometimes called payment in arrears) is not wiped out by a bankruptcy discharge.
- Child Support Debt Is Not Discharged in a Chapter 7 Bankruptcy
In Chapter 7 bankruptcy, child support debt receives special treatment because it is considered a priority debt and is not discharged in bankruptcy. This means that unpaid child support (sometimes called payment in arrears) is not wiped out by a bankruptcy discharge.
- Ongoing Child Support Payments Must be Continued During Bankruptcy
A Chapter 7 bankruptcy does not affect a parent’s obligation to make ongoing child support payments as they become due. If the parent falls behind on his or her child support payments, the automatic stay will usually not prevent a lawsuit to collect past due amounts. If you cannot afford to keep up with your child support payments, a Chapter 7 bankruptcy can help you by wiping out your other debts and freeing up more income to put towards child support.
CHILD SUPPORT DEBT IN CHAPTER 13 BANKRUPTCY
If you are behind on your child support payments, filing for Chapter 13 bankruptcy will not discharge your obligations but it can help you to get caught up. Further you still need to make ongoing child support payments during the Chapter 13 bankruptcy.
- Chapter 13 Does Not Wipe Out Child Support Debt
In a Chapter 13 bankruptcy, child support obligation is treated as a priority debt and can’t be eliminated. You must pay off any outstanding child support arrears (missed payments) in full through your Chapter 13 Plan.
- Chapter 13 Allows You to Catch Up on Missed Child Support Payments
A main benefit of a Chapter 13 Bankruptcy is that it allows you to pay back some or all of your debt with a 3 to 5-year repayment plan. Any child support owed before the filing of the bankruptcy (arrears) must be included and paid off in your Chapter 13 Plan.
Often, paying child support can actually reduce the amount you would otherwise have to pay to general unsecured creditors (such as medical bills and credit card companies) through your plan. Filing for Chapter 13 bankruptcy is a tool to help you get caught up on your back- child support while discharging more of your other unsecured debt.
Free Case Review of Your Child Support and Bankruptcy Issue
If you have questions about what happens to child support in bankruptcy call the attorneys at Levitt & Slafkes, P.C. for a free consultation. Call us at 973-323-2953, or contact us online to schedule a free consultation.
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