How Does Bankruptcy Impact Child Support Payments?
Bankruptcy is a legal proceeding that can provide relief for the debts you cannot repay. Although the process can provide a fresh financial start, there are also some limitations and complications involved. This is particularly true when a borrower owes child support. Bankruptcy may or may not impact the child support payments you owe, but it depends on the type you file. If you cannot afford to pay child support and cannot discharge the debt, you may have other legal options. Below, our Florida bankruptcy lawyer explains in further detail.
When Family Law and Bankruptcy Law Intersect
Family law and bankruptcy are two separate legal areas but when there are certain issues involved, including child support, they can intersect. If you are considering bankruptcy and owe child support, it is important to know how these two legal areas intersect and how that may impact your case.
The most common types of bankruptcy filed are Chapter 7 and Chapter 13. Each handles child support differently. However, neither type will discharge, or eliminate, child support as this type of debt is classified as a priority and therefore cannot be discharged during bankruptcy.
Chapter 7 and Child Support Debt
Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. During the process, a borrower’s assets are liquidated, or sold, to help cover some of the debt. There are some assets that are exempt from liquidation, such as the equity in your home. However, selling property can actually be helpful if you have priority debt such as child support that you need to repay. As a priority debt, child support is one of the first obligations to be paid after assets are sold. Just as Chapter 7 will not discharge child support debt, it also will not eliminate future child support payments.
Chapter 13 and Child Support Debt
During a Chapter 13 bankruptcy case, debt is reorganized in a repayment plan that is more affordable for the borrower to repay. Child support arrears can be included in the repayment plan, which often makes this option more viable for those with this type of debt. In addition to paying the arrears, you must also continue to make regular child support payments to complete the plan successfully. If you do not make payments according to the plan, it could result in your case being dismissed.
What if You Cannot Pay Child Support?
If your child support obligations are causing financial hardship and you cannot make payments, there may be legal options. For example, you may be able to ask the family court for a modification. To get the legal advice you need, it is critical that you work with an attorney who understands family and bankruptcy law.
Call Our Bankruptcy Lawyer in Florida for a Consultation
If you have child support obligations you are finding difficult to repay, our Florida bankruptcy lawyer can help. At Nowack & Olson, PLLC, our experienced attorneys can provide the sound advice you need, guide you through the bankruptcy process, and help ensure a successful outcome. Contact us to schedule a consultation and to learn more about how we can help.
Source:
uscourts.gov/court-programs/bankruptcy/bankruptcy-basics
