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How Does Chapter 7 Bankruptcy Help Child Support Arrears?

Child support law is complicated and can be challenging to understand. Many people making child support payments ask themselves when they consider a Chapter 7 Bankruptcy whether or not child support arrears will be discharged in a Chapter 7 bankruptcy case.

No, you cannot file Chapter 7 Bankruptcy and eliminate your prior child support obligations. Although a creditor can be stopped from collecting on a debt, you owe a child support creditor will not be affected. Child support payments must continue after a bankruptcy is filed.

If you pay child support or have ongoing support payments, or owe back child support payments, you should talk to bankruptcy attorneys about your rights before filing for bankruptcy relief. Unfortunately, child Support Debt will not be eliminated by filing a Chapter 7 Bankruptcy.

back child support payments

Chapter 7 and Child Support Payments

How does chapter 7 bankruptcy help child support arrears? A Chapter 7 Bankruptcy won’t wipe out the child support you owe now or modify ongoing child support obligations, but it can still be worth your while. Even though you cannot discharge child support debt in Chapter 7 or Chapter 13 bankruptcy, but you can still use a bankruptcy filing to your advantage.

Filing bankruptcy can free up monies that are being paid on other nonpriority debts. For example, you will have more money to pay towards your child support debt by freeing up money going to such debts as medical bills or credit cards. Bankruptcy attorneys can help get debt relief for you.

In Bankruptcy Child Support Arrears is considered a Priority Debt

The court system has decided that providing for the children of a parent is essential to society. Accordingly, child support arrears are given special protections under the bankruptcy code. In addition, domestic support obligations are all protected under the US Bankruptcy Code.

What is Priority Debt?

Priority Debt is a classification of Debt found in the US Bankruptcy Code. Priority Debt is Debt that will not be discharged and or must be paid in a bankruptcy filing. Priority debts include child support debt, certain tax obligations, and some Court ordered fines and costs.

Child Support is treated as a Priority Debt in Bankruptcy

As stated above, child support debt is considered a priority debt. Priority debt in Bankruptcy will not be discharged and will survive any bankruptcy filing. It would help if you were careful when considering Bankruptcy. A divorce and family law attorney can help guide you through this process.

If you file for it, your child support arrears will not go away, and you may have to pay back all the money owed before filing and any other unpaid debts, including taxes and unsecured obligations like credit cards, etc.

If you filed a Chapter 13 bankruptcy, any child support arrears must be paid off in full through your Chapter 13 Plan. Therefore, a Plan that does not provide back child support debt or precious child support debt will not be approved.

how does chapter 7 help child support arrears

Bankruptcy and Child Support: Chapter 7 v Chapter 13

When considering Bankruptcy and child support Debt, there are many things to consider. An individual seeking relief from Debt via Bankruptcy will pursue a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Bankruptcy affects child support arrears differently depending on which type you file.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is an excellent option for individuals who can’t afford to pay back their debts. With Chapter 7 bankruptcy, you are granted total forgiveness and do not have to repay your unsecured Debt as long as they meet specific income requirements.

When you file, your property becomes property of the bankruptcy estate. Any nonexempt property can be sold by the trustee and used to pay child support arrears.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is perfect for individuals struggling to pay off their Debt but earn too much income. Chapter 13 allows the debtor to keep some or all of their property while still paying back a portion of the owed money. Chapter 13 is a form of repayment plan. Child support payments must continue after filing Bankruptcy.

How Does Chapter 7 Help Child Support Arrears

It’s important to note that if you owe any child support arrears or back child support debt, it will not be wiped out by filing for Chapter 7 bankruptcy. This is because, under the bankruptcy law, priority debts are nondischargeable in bankruptcy, and as a result, they cannot get eliminated with your discharge of all other obligations. 

Therefore, you must keep making ongoing child support payments if you are in Bankruptcy. The child support arrears will remain with you for the duration of your obligation.

bankruptcy affects child support

Likewise, Chapter 13 will also not discharge a person’s Back Child Support Debt

You should also know that child support arrears are not eligible for discharge under a Chapter 13 bankruptcy because they are considered domestic support obligations. As such, priority debts in child support cases cannot be eliminated by discharging all other obligations.

How the Automatic Stay Affects Your Child Support Obligations

The automatic stay, which is in the bankruptcy law, stops all collection efforts against a debtor. The automatic stay generally takes effect immediately upon the filing of your bankruptcy case.

The automatic stay, which is in the bankruptcy law, stops all collection efforts against a debtor. The automatic stay generally takes effect immediately upon the filing of your bankruptcy case.

However, this does not stop you from paying your support obligations such as child support, alimony, and other family support obligations. For example, if there was an ongoing garnishment or wage order due to back child support, then filing for Bankruptcy will not affect it since they’re outside the scope of the automatic stay.

The automatic stay can stop garnishments on your wages and bank accounts allowing your child support obligations.

You cannot stop making ongoing child support payments when you file for Bankruptcy

Different bankruptcy chapters offer various benefits for child support debtors. Chapter 7 bankruptcy is not designed to stop enforcement proceedings on child support payments. If you have an ongoing child support case in State Court, it will likely continue.

You must continue child support payments even if you file Bankruptcy. If child support payments are not made, the child support creditor can bring a motion to have your child support order enforced against you and could very well garnish wages or levy bank accounts to get its money back.

ongoing child support payments

Filing Bankruptcy can help you pay your child support by eliminating other debts

It’s essential to keep up with child support payments, but sometimes it can be not easy. It may seem like you have no other options and that Bankruptcy is the best option for you because it could wipe out your Debt and free up more income to put towards back child support arrears; however, if possible, try making a payment so that this doesn’t happen!

Back Child Support Payments are a Top Priority, and Will Get Paid Before Other Debts

A Chapter 7 bankruptcy trustee can sell your nonexempt assets and distribute the proceeds among creditors. However, not all creditors are treated equally in bankruptcy court; whether a creditor will get paid depends on what type of Debt it is.

Priority debt such as back child support arrears precedes general unsecured ones like medical bills or credit card payments. A bankruptcy trustee will pay any support arrears first. Child support arrears are required to be paid by a bankruptcy trustee.

Talk to an Experienced Bankruptcy Attorney Today!

If you have an existing order to pay child support and have back child support, you must get expert advice. An attorney skilled in Bankruptcy and child support arrears can help get the debt relief that will matter.

Filing a Chapter 7 Bankruptcy can free up income to allow you to make your child support payments. Filing bankruptcy can eliminate other Debt and prevent a creditor from taking your income and property.

Bruce Law Firm has bankruptcy lawyers familiar with how to put the bankruptcy code to use to help resolve back child support debt. If you have a child support obligation and need help, contact our office for a free consultation. Bankruptcy can provide the debt relief you need to get your life back on track.