If you are feeling overwhelmed by the child support or alimony payments you have been ordered to pay and are considering filing a Chapter 7 or Chapter 13 bankruptcy, it is important to understand that family support payments are considered non-dischargeable debts in bankruptcy. This means that you cannot eliminate your obligation to pay them in your bankruptcy filing.
This does not mean that filing for bankruptcy protection does not help with your support payments, especially if your child support payments are in arrears and a garnishment is going to be used to collect from you.
One of the primary ways filing a personal bankruptcy assists with your support payments is that it allows you to discharge other debts. For example, if you have overwhelming credit card debt or medical bills, eliminating them frees up your money to pay your child support.
In a Chapter 7 filing, the automatic stay typically does not halt or affect certain types of family support actions. This often includes collection actions for child support or alimony. The automatic stay does not apply to legal actions to establish a child support order or to modify a child support order. Additionally, you should continue making your child support payments while your bankruptcy case is pending.
In a Chapter 13 filing, child support payments are considered to be a priority claim, which means that they must be paid in full over the term of your Chapter 13 plan (3 to 5 years). This means that you must pay all past due child support payments before any of your unsecured creditors will be paid. This can be an effective way for debtors who are severely delinquent on their support payments to get caught-up and regain control over their finances.
Understanding how filing bankruptcy will impact your child support payments can be complicated, but we are here to help. Let us review your individual situation and help you understand all of your options and how to regain control over your financial life.
We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..