If you’re like many people, the well-being of your children is your most important priority. Struggling financially doesn’t change this. Even if you are considering bankruptcy, you’ll still want to do right by your children and provide for them. What should you know about bankruptcy and family law?
What if you’re the custodial parent and you rely on your child’s other payment for support payments – but he or she is struggling? How does bankruptcy affect child support payments?
No.
Child support is a priority debt. Bankruptcy does not discharge it. You must continue paying your payments when you file. If there are past due payments, you’re responsible for those, too.
When an individual files for bankruptcy, their child support obligations continue as usual. In fact, the bankruptcy process may even provide a mechanism for ensuring that child support payments are made. For example, if the individual’s income and assets are evaluated during bankruptcy proceedings, any disposable income may be used to fulfill child support obligations.
It’s important to note that while back child support payments cannot be discharged in bankruptcy, other types of debts, such as credit card debt or medical bills, may be discharged, freeing up additional resources to meet ongoing child support obligations. However, it’s crucial to consult with a bankruptcy attorney to understand how bankruptcy may impact your specific situation and to ensure that you continue to fulfill your child support obligations during and after the bankruptcy process.
Bankruptcy’s automatic stay is one of its primary benefits. When you file, the court orders your creditors to stop all debt collection actions. Creditors can no longer contact you or take legal action against you concerning a debt. The debt isn’t discharged – yet – but you do get a break from creditor contact while the court sorts through your case.
However, the automatic stay does nothing to prevent the collection of child support payments. Child support is a court-ordered obligation. Bankruptcy and family law are two separate legal issues handled in two separate courts. The obligation remains in place regardless of any effort you take to file for bankruptcy and your child’s other parent can continue to seek support from you even after you’ve filed.
The chapter bankruptcy you use does affect how the court handles child support issues. Neither relieves you of support obligations, but filing for Chapter 13 makes it a bit more difficult for your child’s other parent to collect. This is because your income is part of your bankruptcy estate for up to five years after you file for Chapter 13.
Recipient parents must request relief from the automatic stay to collect what is owed, but the court lifts the stay in almost every case. If you are a recipient parent fighting for child support payments, an attorney can help you file a request for relief against the paying parent.
You can find out more about the automatic stay with this information from the Cornell Law School.
When addressing issues of bankruptcy and family law, you must understand how the bankruptcy court handles priority debts. A priority debt is a debt that the court considers more important than others. You pay it before any other type of debt.
Not only is child support a priority over debts like credit cards or bank loans, but it’s also a debt over other priority debts. The court satisfies child support debts before other priority debts, such as tax obligations.
In Chapter 13 bankruptcy, back child support payments are added to your bankruptcy payment plan. Current payments must be paid out of your income during the three to five year Chapter 13 plan.
In Chapter 7, back payments are paid from any assets liquidated by the trustee. Your obligation to make payments continues, including any back payments owed, going forward once your bankruptcy case is complete.
Determining how to handle priority debts when you file for bankruptcy is a challenge. For many people, filing for bankruptcy makes it possible to fulfill their most important financial obligation – supporting their children.
If you have questions about bankruptcy and family law or how filing will affect child support, contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.
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