Does Chapter 7 Bankruptcy Help Child Support Arrears?

Chapter 7 might not get rid of child support arrears. However, it can help with child support arrears by eliminating other debts to allow you to put more money toward catching up on your child support payments. Let’s look at how child support arrears are handled in a Chapter 7 bankruptcy case and a Chapter 13 bankruptcy case.

Child Support Obligations and Arrears

Each state has laws regarding child support. Parents have a legal obligation to provide for their children financially, even if the parents do not live with their children. Therefore, states have enacted child support laws. Typically, the non-custodial parent pays the custodial parent (the parent who has the child living with them) a set amount each month. The amount is based on the child support guidelines for the state.

Unfortunately, once a parent misses a child support payment, it isn’t easy to catch up on the payments. Parents might get behind on child support payments because of unemployment, job changes, or illness. Whatever the reason, many states impose severe penalties for child support arrears.

Some states garnish wages and seize state tax refunds for child support arrears. Other states might suspend the parent’s driver’s license until the child support payments are current. The court could also put the parent in jail for non-payment of child support.

Does Filing Bankruptcy Get Rid of Child Support Payments?

At this point, a parent might wonder if they can file bankruptcy to get out of paying child support. Filing bankruptcy does not eliminate your obligation to support your child. Your child support payments continue even though you file for bankruptcy.

The only way to modify child support payments is to petition the family court to lower the payments because of a substantial change in circumstances. Being over-extended because of debt is typically not a sufficient reason for the court to lower your child support payments. You should seek legal advice from a child support lawyer in your state if you believe your child support payments are too high.

Does Chapter 7 Help Child Support Arrears?

Domestic support obligations (DSO) are not dischargeable in bankruptcy. DSO includes child support, alimony, and spousal support. The Chapter 7 trustee specifically asks debtors at the First Meeting of Creditors if they owe domestic support obligations. Furthermore, you must list child support payments and other domestic support obligations in your bankruptcy forms, even if you are current with your payments. Your child’s other parent receives notice of your bankruptcy filing.

Typically, filing bankruptcy stops creditors from pursuing debts. The bankruptcy automatic stay prohibits creditors from taking any legal action to collect a debt. However, the automatic stay does not apply to domestic support obligations. Therefore, wage garnishment orders for child support payments remain in effect even when you file for bankruptcy relief.

Child support is a priority unsecured debt. Therefore, it is not dischargeable. The debt survives the bankruptcy filing. You must continue to pay your child support payments. Additionally, you face the same penalties for non-payment you would if you did not file for Chapter 7 relief.

However, filing Chapter 7 bankruptcy does eliminate most unsecured debts. Dischargeable debts include, but are not limited to:

You can also surrender collateral to get rid of secured debts you cannot afford to pay. For example, if you cannot afford to pay your car payments, you can surrender the vehicle to get rid of the entire car loan, even if you owe the lender more than your vehicle is worth. The same is true if you cannot afford your mortgage payments. When you surrender the collateral in Chapter 7, you do not need to worry about a deficiency judgment.

Getting rid of debts you cannot afford to pay can give you more money to pay toward your child support arrears. A family law attorney might be able to help you propose a repayment schedule to catch up on the child support payments to avoid jail time and other penalties.

Does Filing Chapter 13 Help with Child Support?

Child support is not dischargeable in Chapter 13. You must continue to pay your domestic support obligations to remain in Chapter 13. If you fall behind on support payments during your Chapter 13 case, the court could dismiss your bankruptcy case.

However, Chapter 13 can help with child support arrears more than filing Chapter 7. You can include past-due support payments in your Chapter 13 plan. The child support arrears must be paid in full through your bankruptcy plan. However, the amount is more manageable because you can spread out the payments over 60 months. The Chapter 13 bankruptcy lets you avoid the penalties for being behind on child support payments.

An important note is that you must remain current on future child support payments. At the end of your Chapter 13 plan, you must certify that you are current with all domestic support obligations. You cannot receive your bankruptcy discharge if you missed any child support payments during your Chapter 13 case.

Should You File Chapter 13 or Chapter 7 if You Are Behind on Child Support Payments?

A Chapter 13 bankruptcy plan pays your past due child support payments to stop further collection efforts. Chapter 13 cases are wage earner plans. Therefore, you must have sufficient income to fund a Chapter 13 plan. If you do not have a steady income sufficient to pay your bankruptcy payments, you will not qualify for Chapter 13.

Use our free chapter 13 calculator to estimate how much your Chapter 13 plan payments would be if you file under this chapter.

On the other hand, Chapter 7 bankruptcy cases are intended for debtors who do not have sufficient income to repay their unsecured debts. Therefore, you must meet income requirements to qualify for a bankruptcy discharge under Chapter 7. If your income exceeds the median income limits for your state, you might not qualify for Chapter 7.

Use our free chapter 7 calculator to learn if you might qualify to file under Chapter 7.

Get Help With Bankruptcy and Other Debt Relief Options

Ascend helps individuals and couples review their debt relief options to find a way to get out of debt that works best for them. We review debt relief options including:

Call or text Ascend at (833) 272-3631 or contact us online for a free case evaluation. We want to help you take control of your debts for a better financial future for you and your family. Use our free debt relief calculator below to explore all of your options.

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