When a parent suffers an economic set-back, like a job loss or layoff, the whole family suffers. The family budget is tightened and sometimes bills go unpaid. One of the most tragic consequences of an interruption in income is the inability to pay a child support obligation.
Child support payments do not automatically abate when the non-custodial parent’s income is interrupted. A court ordered child support obligation is unconditional. If you cannot pay, the missed payment becomes a debt owed to the custodial parent. A past child support debt cannot be discharged in a bankruptcy proceeding.
Fortunately, filing bankruptcy gives the debtor some relief. First, bankruptcy can discharge other accumulated debts that can make it easier to pay your child support obligation. Second, after your income has been restored, a Chapter 13 bankruptcy can give you up to five years to pay off the missed payments. You cannot be garnished during that period and your income is protected by the federal bankruptcy court.
Filing bankruptcy can protect you from certain child support collection proceedings. However, the bankruptcy automatic stay does not apply to:
(1) the establishment of a child support obligation;
(2) the collection of child support from property that is not property of the estate; or
(3) the withholding of income that is property of the estate for payment of a child support obligation under a judicial or administrative order or statute.
Domestic support obligations, including child support obligations, receive top payment priority when funds are available to pay creditors in a Chapter 7 case. In a Chapter 13 case, child support arrears are paid through a “repayment plan” and are paid as a first priority. Support payments due after the bankruptcy filing date must be kept current or the debtor’s plan will not be confirmed, and the bankruptcy court will not issue a discharge in a case where child support is owed.
In addition to child support, debts that are “in the nature of support” (e.g. a child’s medical expenses, educational expenses, etc.) are ineligible for discharge. The bottom line is: child support obligations must be paid. Fortunately, the bankruptcy laws offer options to make the debtor’s payment burden more bearable. If you have a child support obligation and are considering filing bankruptcy, consult with an experienced bankruptcy attorney and discuss your options.