May 2, 2021
As a bankruptcy lawyer from a law firm like Pioletti Pioletti & Nichols can explain, if you are responsible for paying child support and you’re also having trouble managing your finances, you might be considering filing for bankruptcy.
Is Bankruptcy a Good Choice?
While bankruptcy can be a good option for some people, it’s important to remember that isn’t a perfect solution for everyone. Not only will it affect your credit score for years to come, but depending on the debts that you have, you might not even be able to get your debts discharged. Child support payments are a prime example of debts that cannot be discharged during any bankruptcy (even a Chapter 7 bankruptcy, where most debts can be discharged and erased).
However, there are some cases where filing for bankruptcy can be a good option. Chapter 13 bankruptcy, for example, allows you to reorganize your debts and create a repayment plan — not to mention, it also stops harassment from debt collectors.
No matter your situation, you’ll want to arrange a meeting with a bankruptcy lawyer before moving forward with a bankruptcy case. Each person’s case is unique and it’s important to know what to expect if you do choose to file for bankruptcy.
Bankruptcy and Child Support
Some parents file for bankruptcy thinking that their unpaid child support payments will be discharged along with all their other debts. This is not what happens. In fact, a child support lawyer would likely tell you that the opposite occurs: child support debts are considered “priority debts” and they are paid off before any other creditors are paid. In a Chapter 7 bankruptcy, this means that your assets may be seized and used to help repay outstanding child support bills.
With Chapter 13 bankruptcy, this may mean that your repayment plan prioritizes paying off your child support bills before any other debts. Because a Chapter 13 repayment plan cannot last longer than five years, it also means that your monthly repayments may be quite high (depending on how long you have been delinquent in child support payments). Furthermore, you’ll be expected to continue paying current child support bills on top of making back payments in your payment plan.
This can sound very overwhelming, but keep in mind that a bankruptcy court will assess your total financial situation and your ability to pay back your debts. If you are earning income on a regular basis, the court will look at your average monthly income to determine how much your payments will be. If you change jobs or lose your job and your income decreases, the court may be willing to reassess your payment plan. (Similarly, if you get a raise or a new job that pays more, the court may require you to make higher monthly payments.)
Taking Action Sooner Rather Than Later
Both a bankruptcy lawyer and child support lawyer would likely recommend that you take action as soon as possible if you’re having financial trouble. If you are having difficulties making child support payments on time, it’s better to seek an adjustment in your payments than to let these missed payments pile up.