Can Bankruptcy Wipe Out Child Support Payments?
When a couple divorces with children, one parent almost always has to pay child support to the custodial parent. Child support serves many purposes, perhaps none more important than making sure that children do not end up on public welfare. If you have a child, then the state absolutely expects you to financially support it, and this obligation extends even if you have no interest in seeing your child.
Unfortunately, many parents fail to pay their child support in a timely manner and accrue unpaid child support, called “arrearages.” As a leading South Florida bankruptcy firm, we often receive phone calls from members of the public, and one question people ask is whether they can erase child support arrearages with bankruptcy.
The answer is easy: no, you can’t. Bankruptcy provides very little protection in this situation.
Child Support is Nondischargeable Debt
Congress made a deliberate policy choice when exempting child support from bankruptcy protection. In the bankruptcy code, certain debts are listed as nondischargeable, meaning you can’t eliminate them. You can find the list at 11 U.S.C. § 523(a), and included on that list is domestic support obligations, i.e., spousal support and child support.
Because you cannot discharge the debt, filing a Chapter 7 won’t eliminate your arrearages. However, depending on your debt, filing for Chapter 7 could free up a considerable amount of money. You could eliminate credit cards, medical debt, and most personal loans. With them out of the way, you might have enough funds to start attacking your unpaid child support.
The Automatic Stay Does Not Apply
When a debtor files for bankruptcy, the automatic stay prevents creditors from taking any action to obtain repayment on a debt. All collection efforts, from phone calls to lawsuits, must cease. Creditors can get into trouble if they persist harassing a debtor who has filed for bankruptcy.
However, the Chapter 7 automatic stay does not apply to child support arrearages. This means your ex can go into court and have your wages garnished.
There May Be Benefits to Filing for Chapter 13
With a Chapter 13 bankruptcy, you create a payment plan that lasts 3-5 years, during which you make regular payments to your creditors. At the end, any unpaid dischargeable debt will get wiped out.
If you have child support arrearages, there may be benefits to filing Chapter 13:
- You can include them in your Chapter 13 repayment plan, which gives you more time to pay them off. Of course, unpaid child support will not be discharged at the end of the repayment plan, but you do gain more time.
- You can minimize the amount you pay to your other creditors, such as a credit card company. And that credit card debt can be discharged at the end of the repayment period.
- The automatic stay will protect you in Chapter 13, preventing your ex from taking other legal action to obtain payment of the arrearages.
Visit Nowack & Olson to Discuss Your Options
If you have unpaid child support, then filing for bankruptcy will not be a silver bullet. Nevertheless, you might get the breathing room you need by eliminating other debts.
To discuss your situation with an experienced Plantation bankruptcy attorney, contact Nowack & Olson today. You can schedule a free consultation by calling 888-813-4737.