Bankruptcy & Child Support Arrears in New Jersey

By Heather Frances J.D.

Bankruptcy can help you get a fresh start financially by eliminating many of your debts or giving you a chance to catch up on debt payments. Filing bankruptcy in New Jersey does not eliminate child support arrearages, but it may allow you to stop making payments on your arrearages for a while.

Automatic Stay

When you file bankruptcy, an “automatic stay” goes into effect, pausing most collection efforts against you, including foreclosures, garnishments, bank levies and other debt collection efforts. You must stay current on your child support payments while your stay is in effect, and bankruptcy does not erase your child support debts. Your creditors can ask the bankruptcy court to lift this stay under certain circumstances, thereby permitting them to continue collection efforts.

Chapter 7

In a Chapter 7 bankruptcy, your assets are sold by a court-appointed bankruptcy trustee to pay your debts, unless those assets are exempt from sale under state or federal law. Many Chapter 7 filers have no nonexempt assets, so there is nothing for the trustee to sell. However, Chapter 7 neither eliminates your current obligation to pay child support nor eliminates or reduces past due child support obligations. If you owe past due child support, you will owe the same amount after your bankruptcy is complete that you owed when you filed. However, if the bankruptcy court lifts your automatic stay for child support purposes, you must make payments on your past due support while your bankruptcy is in process.

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Chapter 13

Chapter 13 bankruptcy reorganizes your debt over a three to five year repayment plan. In New Jersey, as in other states, the bankruptcy court requires you to make the payments as scheduled in your repayment plan. The repayment plan must include your ongoing monthly child support payments as well as the entire amount of your arrearages, unless the recipient of your child support payments agrees to another method of payment.


After you successfully complete your repayment plan in a Chapter 13 bankruptcy, you may receive a discharge, or elimination, of your unpaid debts. However, you are not entitled to a discharge if you are not current with your child support payments, including any and all monies past due. No portion of your child support -- or other family support obligations -- can be discharged in bankruptcy.

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Bankruptcy can give you a fresh financial start by allowing you to restructure or erase your debts under a court-supervised process. However, your bankruptcy case doesn’t go away once your court process is complete. Bankruptcy stays on your credit report and can hurt your ability to obtain credit in the future, including home loans.

Disadvantages to Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy gives a debtor the opportunity to get back on his feet when the debt load becomes too much to handle. However, Chapter 13 bankruptcy proceedings carry potential disadvantages, such as negatively impacting the debtor's creditworthiness, so a debtor may choose to file another type of bankruptcy case or attempt to avoid bankruptcy altogether.

What Does It Mean if a Bankruptcy Is Lifted?

When an individual debtor files for Chapter 7 or Chapter 13 bankruptcy, creditors must immediately stop their collection efforts. Creditors sometimes may attempt to get around this ban by petitioning the bankruptcy court to "lift" the stay. A bankruptcy lift allows the creditor to continue collection activity, such as garnishing wages or foreclosing on a home, while the bankruptcy case is in progress.

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