Bankruptcy and Child Support: Are Payments Affected?
When you file for bankruptcy, your child support obligations will receive special treatment. Nevertheless, you cannot evade your child support commitments by filing for bankruptcy. Yet, through a Chapter 13 bankruptcy repayment plan, you can catch up on all your missed payments.
Recently, Congress made the decision to exempt certain debts from getting wiped out in bankruptcy. These debts are referred to as priority debts. Child support is one of these priority debts.
You Still Have To Pay Child Support If You’re In A Bankruptcy Process
You are still held responsible for every bit of your child support payments even after you receive a discharge at the completion of your bankruptcy case. In the instance that you were behind on your payments when you filed for bankruptcy, you will still be required to pay all due amounts. Chapter 13 helps you to reorganize the debts and come up with a plan to catch up on all such missed payments, including child support.
Priority debts are non-dischargeable and also receive special attention during your bankruptcy incidents. According to Chapter 7, priority debts are to be paid prior to settling any other debts. This is to say, the debts are given special treatments if there are any available funds to dispense to creditors.
How Congress Ruling On Chapter 13 Bankruptcy Affected Child Support Arrears
Through a previous ruling dealing with Chapter 13 bankruptcy, Congress declared that any child support payments that fell behind before an individual initiated the bankruptcy process must be paid in full.
According to law, a Chapter 13 bankruptcy process cannot take longer than five years. Therefore, unpaid child support arrears that exceed this period of five years can result in a high monthly repayment plan. Additionally, you are obliged to continue with your child support payments after you have filed for and potentially completed a bankruptcy process.
There are certain requirements that you must fulfill before the court can offer you a Chapter 13 discharge. More specifically for the purposes of this article, you must present credible evidence to the court that you are up-to-date on each and every one of your child support arrears requirements by the time your case is closed. When you show your current proceedings and they are satisfactory, you may then be discharged. Keep in mind, this is only one of the requirements that must be fulfilled.
Handling Creditors and Child Support Obligations
Whenever your bankruptcy filing is accepted, you obtain what is known as an automatic stay. This automatic stay prevents a majority of your creditors from collecting their debts. For more on this topic, read our previous blog about this issue here.
After the stay is issued, permission must first be acquired from a bankruptcy court of law before a creditor can continue to collect their debts from you. As a result, after you have filed for bankruptcy, you are temporarily protected from such debt collectors until you regain your ability to repay the debts. Nonetheless, the aforementioned automatic stay will not shield you from matters relating to your child support payments.
Child support will not prohibit the legal proceedings seeking to establish an order for child support. It does not prevent collection of child support payments from any of your property that is not a part of your bankruptcy estate. Hence, the wages you earn after filing for bankruptcy are not protected by the automatic stay. Through these wages and other earnings, you are expected to continue servicing your child support payments.
It is considered illegal for you to withhold payments of your child support after filing for bankruptcy, particularly if you continue to earn wages in one way or another. Similarly, a Chapter 7 bankruptcy filing will not prevent legal proceedings from forcing the collection and resolution of child support arrears. It is evident that you are obliged to pay your child support without consideration for your financial status. Even after filing for bankruptcy, you are expected to take advantage of chapter 13 discharge to top up on the payments that you have fallen behind on.