While most parents would like to provide for their children, unfortunately some parents are unable to do so. In cases where a parent faces financial difficulties and incurs debt he or she is unable to pay, he or she may file for bankruptcy. If you are obligated to pay child support and intend to file bankruptcy, or your child’s co-parent from whom you receive support is seeking relief from debt via bankruptcy, it is important to know how bankruptcy affects child support. While there are different types of relief available for individuals under the bankruptcy code, none of them will alleviate any child support obligations imposed by a mutual agreement or court order. A bankruptcy filing may make it easier to recover overdue child support, however.
An individual seeking relief from debt via bankruptcy will seek either a Chapter 7 or Chapter 13 bankruptcy. A Chapter 7 bankruptcy is for individuals who meet certain income requirements. It grants total forgiveness for unsecured debts. In other words, if a person who has outstanding credit card debt or medical bills files for Chapter 7 bankruptcy, he or she does not have to pay back the debt. Certain property cannot be protected through Chapter 7 bankruptcy and will be sold to pay back creditors. Chapter 13 bankruptcy provides relief to individuals who earn too much income to qualify for Chapter 7 bankruptcy and requires them to pay back a portion of their debt. Chapter 13 bankruptcy has the benefit of allowing the debtor to keep nonexempt property.
When you file for Chapter 7 bankruptcy, there is an automatic stay that prevents anyone from pursuing claims against you. The stay does not prevent actions to establish child support or seek past due child support, however, and a party seeking support from you is allowed to proceed regardless of the fact you filed a Chapter 7 bankruptcy. Any income you earn after you file for bankruptcy is not considered part of your bankruptcy estate in a Chapter 7 bankruptcy, and can be considered in determining child support obligations and used to pay child support arrearages. In a Chapter 13 bankruptcy, however, any income earned is considered part of the bankruptcy estate and a party seeking to impose a support obligation must request relief from the stay to do so. If a person who filed for Chapter 13 bankruptcy is already subject to a child support order and fails to make support payments, the court will usually lift the stay so the support can be recovered.
As the importance of providing for minor children is recognized throughout state and federal court systems, in both Chapter 7 and Chapter 13 bankruptcies, child support debt is considered a priority debt that is not dischargeable in bankruptcy. As such, any child support debt will not be forgiven if you file for bankruptcy and you will be required to make up any overdue payments. Additionally, child support debt is paid first over other priority debts such as tax obligations, and before unsecured obligations. If you filed a Chapter 13 bankruptcy, any child support debt must be paid off in full through part of your repayment plan in order for you to receive a discharge from your debts.
