Bankruptcy and child support
No matter how tight the money is, taking care of your children is always a priority. If you’ve run into more debt than you can handle and are also responsible for child support, you may be wondering what filing bankruptcy will mean for your situation. Will child support payments be included in bankruptcy? Or will they be reduced? I can help you analyze all these important questions. One thing to keep in mind is that child support cannot be canceled through any kind of bankruptcy.
Chapter 7
While filing any bankruptcy chapter will start the automatic stay and then you can stop making unsecured debt payments, you will still need to keep up with your payments (as well as your secured debt payments, if you want to keep your property). ) Bankruptcy of any kind will not stop the support of your children and will not affect any court proceedings to establish or modify your support. All priority debts, like child support, must be paid in full, on time each month, and if you don’t make your payments, you could be sued. Filing a Chapter 7 could result in some of your nonexempt assets being taken and sold to repay creditors, but we will use the many exemptions available to protect as much of your assets as possible. If the court takes part of your property, the trustee will decide which creditors receive payment and how much. Child support is often the top priority.
Chapter 13
One of the benefits of choosing a Chapter 13 bankruptcy is that you can include any child support arrears in your repayment plan as a priority debt. We will design your plan to include your full child support payments with the late payments spread over the course of your 3-5 year plan. Making your child support payments can reduce the overall debt that you will pay off in Chapter 13. Priority debts are paid first, and any remaining disposable income goes to other lower priority or unsecured debt. In some cases, when little disposable income remains, unsecured debts are not paid at all before they are discharged.
It is imperative that you stay current with your Chapter 13 payment plan; otherwise, your creditors may request a “waiver of automatic stay.” If the court approves, you will need to start making full debt payments right away. You will need to keep up with your child support payments until the end of the debt period, or your bankruptcy settlement could be delayed.
Make a plan
Of course, you want to make sure your children are well cared for and willing to make the necessary sacrifices to make that happen. If you need to file for bankruptcy, the court will review your overall financial situation, which could result in a modification of your child support payments. You can also free up enough space in your budget by liquidating bankruptcy so that your payments are easier to handle. Regardless of your situation, we can work together to make a plan that works for you.
