Whether you’re responsible for paying child support obligations or the parent to whom child support payments are being paid, the question of how bankruptcy will impact a child support order is a significant and important question. The short answer to the question is that bankruptcy filing will not affect child support debt: a standing child support order cannot be discharged by bankruptcy, and any child support arrears that exist are considered a priority debt. That means that if your assets are sold to satisfy your creditors, the amount that you owe for your children will be paid first.
Automatic Stay Does Not Apply to Child Support
One of the first things that happens when you file for bankruptcy is that an automatic stay is put on all debt collection — your creditors are notified of your filing, and are legally required to stop all calls and collection efforts. This often provides welcome relief. But when the trustee notifies the recipient of your child support payment of your filing, it is simply to let them know that their payment rights continue, and that they can take advantage of child support collection services to ensure that their priority status is upheld.
Legal Proceedings Involving Child Support Continue
Though other legal proceedings may be put on hold as a result of a bankruptcy filing, this is not true for actions surrounding child support. Wage garnishment will continue, and if a request for modification of the support order is pending it will continue. So too will the pursuit of asset sales intended to help satisfy child support arrears.
The Effect of Chapter 7 and Chapter 13 Bankruptcy Filing on Child Support Arrears
A parent’s top priority should always be the wellbeing of their child, so it is important for you to understand the effects of both a Chapter 7 bankruptcy filing and a Chapter 13 filing. There will be no change whatsoever to weekly payment obligations: the real impact is felt when arrears are owed. If you owe a significant amount of back child support and you’ve filed for Chapter 13 bankruptcy, your debt will be reorganized so that payments will be spread out over three to five years. If you file for Chapter 7, any property that is liquidated to satisfy debt will be used to pay off your child support balance first.
For more information on how bankruptcy will affect your personal situation, contact our attorneys today.
