Does Filing For Bankruptcy Affect Your Child Support Payments?

Does Filing For Bankruptcy Affect Your Child Support Payments?

Usually people file for bankruptcy as a last resort. However, things can become increasingly complicated if you are also behind on your child support payments. When this is the case, you may be wondering if filing for bankruptcy will impact your child support payments. It is important that you speak with your bankruptcy lawyer as soon as possible when you are behind on your payments, but if you do have outstanding debt regarding child support, filing for Chapter 7 bankruptcy does not remove any obligation to pay that debt. If you have any questions about this or would like to speak with an attorney who can walk you through the process of bankruptcy and how it impacts child support, please reach out to a law firm now.

What happens when you file for Chapter 7 bankruptcy?

If you and your attorney decide to pursue Chapter 7 bankruptcy, you might be doing so because you know that a court will impose an automatic stay that stops almost all creditors from collecting their debts from you. This is a highly beneficial aspect of filing for bankruptcy. However, when you file for bankruptcy, this automatic stay does not prevent you from making payments on your child support and it will not delay a lawsuit regarding past-due payments on child support.

Why is child support not included in an automatic stay?

The law considers any child support debt to be a priority debt. Thus, even if many of your other debts are discharged, you are still required to continue paying child support and must make up any missed payments. Filing for Chapter 7 bankruptcy can still be helpful to the process of paying child support, though. When you file, it can help you by wiping out other debts you owe, giving you more room with your income to make those child support payments.

Are there other ways that filing for bankruptcy can help with my child support payments?

When you file specifically for Chapter 7 bankruptcy, a debtor trustee is usually in charge of your nonexempt assets and selling them. When they sell these assets, their job is to distribute the proceeds among the different creditors you owe money too. Typically, this would be in the form of past due medical bills or credit card debt. However, child support is a priority debt among these. So, the trustee could use the proceeds from your nonexempt assets to begin paying off your past due child support debt. For example, if you owe $7,000 in credit card debt and $2,000 in back child support and your trustee sells your nonexempt property for $2,000, that $2,000 in proceeds will first go to pay your child support debt even though your credit card debt is higher.

Filing for bankruptcy can be complicated, and it can feel like even more of a burden when you have child support debt looming over you. However, trusted attorneys can help you determine if filing for bankruptcy is the right option for you and how you can begin paying back your child support debt. Set up your appointment today.

 

Source: Family Law Attorney Plano, TX, Scroggins Law Group

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