How to File Chapter 13 Bankruptcy to Clear Child Support

By Heather Frances J.D.

Filing a bankruptcy case can help you get back on your feet financially by discharging certain debts so you no longer have to pay them. However, some debts, like child support, cannot be erased in bankruptcy, but bankruptcy can help you become current on your obligations and thereby, clear up any past due support.

Chapter 13

Most individual debtors who file for bankruptcy use either Chapter 7 or Chapter 13. Under Chapter 7, often called “liquidation,” a court-appointed bankruptcy trustee seizes certain assets and sells them to repay your creditors. Under Chapter 13, you design a repayment plan to gradually repay your debts over three to five years. Creditors must cease their collection efforts once you file and the court must approve your repayment plan. After your repayment period is complete, you will receive a discharge of any eligible debts that remain unpaid.

Categories of Debt

Not all debts are treated the same under Chapter 13. Bankruptcy law divides your debts into three categories — priority, secured and unsecured — and treats each category differently. Priority debts, such as child support, most taxes and the costs of the bankruptcy case, have special status and you must pay these debts in full. Secured debts, including your mortgage and vehicle loans, are those secured by collateral the lender has a right to take back. Except for mortgages, these debts can be restructured over the life of the repayment plan. Unsecured debts are those that are not secured by collateral, such as credit card charges.

Get a free, confidential bankruptcy evaluation. Learn More

Child Support Arrears

Like many other debts, past due child support can be included in a Chapter 13 repayment plan. Your ex-spouse or state child support agency can make a claim against your bankruptcy estate to bring the debt to the court’s attention. As a priority debt, any arrears must be paid off entirely over the life of the plan. In contrast, unsecured debts, such as a credit card balance remaining after your repayment plan is complete, can be discharged, or erased, by the court. In fact, child support is so significant to the bankruptcy process that the court will not discharge any of your debts until you certify you are current on your support obligations and your arrears have been paid.

Automatic Stay

When you file for Chapter 13 bankruptcy, you receive an automatic stay that halts nearly all collection efforts. Most creditors cannot attempt to collect debts once this stay is in place, but the stay does not apply to certain child support collections. Your ex-spouse can still attempt to establish child support orders or collect child support from your property if that property is not part of your bankruptcy estate, and your income can still be withheld to pay child support. For example, a court can still order your tax refund seized to pay your past due support.

Get a free, confidential bankruptcy evaluation. Learn More
Bankruptcy & Child Support Arrears in New Jersey
 

References

Related articles

How to File Bankruptcy With Unsecured Debt

Many people who file for bankruptcy do so because they seek a financial clean slate and relief from a heavy debt burden. Whether you file under Chapter 7 or Chapter 13, the court can discharge – or erase – many of your unsecured debts at the end of your case. Your eligibility to file bankruptcy is not affected by whether your debt is secured or unsecured.

What to Do About Child Support If an Ex-Husband Files for Chapter 13 Bankruptcy

Chapter 13 bankruptcy provides a way for debtors to get a fresh start financially by allowing them to pay off debts under a three- to five-year repayment plan. At the end of the repayment period, eligible debts not fully paid can be erased, or discharged, by the bankruptcy court’s order. But, not all debts are dischargeable in bankruptcy, including child support.

How Does Bankruptcy Affect Child Support in Illinois?

Bankruptcy provides much needed debt relief and a fresh financial start. Although bankruptcy erases most debts, existing child support obligations are not among them. This means that the parent filing bankruptcy is still on the hook before, during and after the bankruptcy. But if a parent owes back child support, filing for bankruptcy may help him catch up.

Bankruptcy

Related articles

What Happens at the End of a Chapter 13?

Debtors typically file for bankruptcy to receive a financial fresh start. Though there are multiple types of bankruptcy ...

Can Bankruptcy Be Used to Stop Divorce Proceedings?

If you want your divorce to be over as quickly as possible, you may want to wait until your divorce is final before ...

Laws on Debt Forgiveness Through Chapter 13

When debt piles up, individual debtors may need the structure of a bankruptcy case to get back on their feet again. If ...

Can Back Taxes & Child Support Be Reduced in Bankruptcy?

Bankruptcy can help you clear up many past debts, such as credit cards, personal loans and other financial obligations ...

Browse by category
Ready to Begin? GET STARTED