“Sometimes it’s difficult to collect past-due child support,
especially when those amounts reach into the tens of thousands of dollars.
The average amount owed among noncustodial parents with child support
debt is more than $21,000,” according to the
Office of Child Support Enforcement.
If you can relate to the above paragraph because you too have had difficulty
paying your child support, you may be wondering if you can file for
bankruptcy and include your child support debt. This is a reasonable question indeed,
and it’s one that our clients do ask us periodically. In this article,
we explain how bankruptcy affects child support obligations.
Child Support Cannot Be Discharged in Bankruptcy
Like alimony (spousal support), child support cannot be discharged in
Chapter 7 or
Chapter 13 bankruptcy. But if you file a Chapter 13, you can catch up on your child
support arrears through a Chapter 13 repayment plan, which lasts 3 to
5 years depending on your income and debts.
“Why does child support receive special treatment in bankruptcy?”
you might ask. It’s because Congress decided that it was just too
important to wipe out in bankruptcy. Child support has been categorized
as a priority debt; therefore, it cannot be discharged in bankruptcy.
So, even if you were to complete bankruptcy and get it discharged, you
would still be on the hook for the full child support balance, which may
Child Support & Chapter 13 Bankruptcy
Even though child support cannot be reduced or erased through bankruptcy,
it does receive priority treatment in a bankruptcy case. As a priority
debt, whether you file a Chapter 7 or a Chapter 13, the child support
would get paid before any other debts, including other priority debts.
So, if you filed a Chapter 7 and you had any non-exempt assets that were
liquidated, the proceeds from those would go to your child support arrears
first before any other debts.
If you were to file a Chapter 13 and you had other non-priority debts,
such as credit card debt, the child support would be paid first because
it’s a priority. In effect, your child support debt could actually
reduce how much you have to pay on other, non-priority debts.
Since most parents would rather see their money go to their children than
credit card companies, Chapter 13 can help debtors catch up on child support
arrears while they discharge more of their unsecured debts.
To learn more about Chapter 7 and 13 bankruptcies,
contact Albaugh Law Firm today.