Child Support & Filing for Bankruptcy
Child support, alimony, family support, spousal support, spousal maintenance, or any other names you decide to call them are considered non-dischargeable debts in bankruptcy. More specifically, child support and spousal support cannot be eliminated in a Bankruptcy Proceeding.
Bankruptcy can sometimes help in situations where support obligations are in arrears or a garnishment is about to effectuated for arrears. In some situations, the Bankruptcy Court could provide a forum to address any disputes about what may be owed or may have already been paid prior to filing bankruptcy. A bankruptcy judge may address accounting issues on what is due and owing in a support claim, but a Bankruptcy Court will usually not address any support orders made by a Family Law Court, or modify any future ongoing support.
While you can’t eliminate support obligations in a Bankruptcy, it is possible to eliminate other creditors who take money away from you which could otherwise be put toward any support arrears.
Contact the Texas Bankruptcy Lawyers at The Law Offices Of R.J.Atkinson to see if filing bankruptcy can help you to relieve your debt problems or address any of your support claims. Our Texas Bankruptcy Attorneys can provide you a free bankruptcy evaluation and a free bankruptcy means test to determine your bankruptcy relief options.
- Chapter 13 Bankruptcy and Support Claims
In a Chapter 13 Bankruptcy, support claims have a higher priority than taxes do. Just like with taxes, support obligations in a Chapter 13 are considered “priority” claims, which by law, must be paid in full over the period of the Chapter 13 Bankruptcy plan. So in a Chapter 13 Bankruptcy, the repayment of past due support is paid before your unsecured creditors, and before tax claims.
For many who are behind on support, a Chapter 13 repayment plan can provide a way to repay past due support arrears. If you owe back support of any type, filing for Chapter 13 Bankruptcy might allow you to regain control of the support obligations over 3 to 5 years. You might also be able to avoid garnishment of wages for past due alimony or child support by filing a Chapter 13 Bankruptcy. The automatic stay of bankruptcy will protect you from all creditor actions to collect pre-filing debts while you propose and perform on a Chapter 13 repayment plan. A Chapter 13 Bankruptcy repayment plan can allow you to get current based on a payment schedule you can adhere to based on your disposable income. In a Chapter 13 Individual Debt Adjustment, you won’t be able to discharge the support obligation at the end of a bankruptcy like you can with other types of debt. If you do file for Chapter 13 Bankruptcy, you must pay all support obligations that come due after the petition is filed. If you fail to do so, your case might be dismissed.
- Chapter 7 Bankruptcy and Support Claims
When you file for Chapter 7 Liquidation Under The Bankruptcy Code, it will most likely have no effect on any support claims, lawsuits, garnishments, judgments, or collection actions involving support issues. Even though the automatic stay of bankruptcy stops, all actions to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless a creditor attempts to collect from the property of the estate.
In a Chapter 7 Bankruptcy, the property of the estate includes all money, property, possessions, and interests you own at the time of filing. Any monies earned post-petition, or after the bankruptcy case is filed, are not considered property of the estate. So, ongoing support isn’t affected by filing for Chapter 7 Bankruptcy because most support obligations are paid from current or future income. So if you file for Chapter 7 Bankruptcy, it will have little if any impact on your support obligations.
- Support Claims and The Automatic Stay
The filing of a Bankruptcy under any Chapter under the Bankruptcy Code Stops any and all collection efforts against a Debtor, however The Automatic Stay does not operate as a stay for certain types of actions such as those involving alimony, maintenance, and child support obligations. Support obligations are not subject to the provisions of the automatic stay, and as such, the automatic stay doesn’t apply to actions to establish a support order, modify a support order, or to collect support from post petition wages.
Any garnishments or wage orders that continue to deduct ongoing, or currently due support from your wages aren’t usually affected by your filing for bankruptcy. However, wage orders that collect upon past due support may likely be stayed in Chapter 7 and definitely stayed in Chapter 13.
- Non Dischargeability of Certain Obligations From Divorce
A previously stated, any obligations that arise from a divorce or marital settlement that are orders of a court to pay child support, spousal support, alimony, maintenance, as well as attorney's fees from a divorce proceeding which include those to modify support are not dischargeable in a Bankruptcy. These are inclusive of any payments that go to support a former spouse and/or minor children.
However, if an obligation from a divorce is in the nature of property settlement the dischargeability may be possible, but generally all property settlement obligations are presumed to be non-dischargeable. Sometimes in very rare instances a person might be able to overcome the presumption of non-dischargeability and possibly have them discharged. This however, requires showing that the person owing the obligation (the “debtor” in bankruptcy) cannot pay the debt and still take care of themselves, their dependents, or their business. They must also show that discharging the debt(s) would result in a benefit to them (the “debtor”) that would outweigh the harm that would be caused to a former spouse or child by non-payment 11 U.S.C. §523(a)(15).
Bankruptcy and Support Information
If you are considering filing for Bankruptcy under Chapter 7 or Chapter 13, and you have support obligations or collection actions arising out of support obligations, it is extremely important to seek legal counsel for your specific situation. Every Bankruptcy case has a different set of facts and circumstances which ultimately affect the outcome or potential outcomes of a matter.
To learn more about Bankruptcy and Child Support or Bankruptcy and Divorce, contact the Texas Bankruptcy Attorneys at The Law Offices Of R.J.Atkinson. We have helped thousands get a fresh start in Bankruptcy and we might be able to help you.
If you live in Austin, San Antonio, Dallas, Plano, Houston, San Marcos, Waco, New Braunfels, or most anywhere in the State of Texas contact the Texas Bankruptcy Lawyers at The Law Offices Of R.J.Atkinson. An experienced Texas Bankruptcy Lawyer can help you decide if filing bankruptcy is the best option for you to address your support obligations or to get rid of your debt, significantly reduce your debt, or reorganize your debt.
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Contact Texas Bankruptcy Lawyer R.J.Atkinson: 800-436-9056