If you owe child support, you may wonder how bankruptcy affects child support. However, filing for bankruptcy does not affect child support – you will still be expected to promptly make your child support payments even after you've declared bankruptcy.
In this blog, we will explain more about how you can navigate bankruptcy while having to pay child support. Bankruptcy gives you a chance to have a clean start, and you will still get to work on your finances and credit reputation even if you remain liable for child support payments. Furthermore, bankruptcy discharges most of your debts, making you more comfortable paying child support.
If, after reading this article, you will still have more questions about how you can navigate your bankruptcy while owing child support, we invite you to contact us at San Diego Bankruptcy Attorney for a free consultation. We are here to help you successfully navigate your bankruptcy and get back on your feet again.
Filing for Bankruptcy as a Noncustodial Parent
As a noncustodial parent, you may owe child support to your ex-partner. You are still expected to pay child support even after you have filed for bankruptcy.
Filing for bankruptcy does not affect your legal obligation to pay child support. You will remain liable for child support payments. Therefore, it would be best to cooperate with your ex-partner when making the child support payments.
You may opt for either chapter 7 or chapter 13 bankruptcy. Your attorney will advise you on which type of bankruptcy is ideal for your situation. However, regardless of the type of bankruptcy you have filed for, the bankruptcy trustee will still expect you to make child support payments.
What to Do After you have Filed for Bankruptcy as a Noncustodial Parent
Filing for bankruptcy is a complicated process. It is time-consuming, and it involves too much paperwork. This is why it is best to hire a bankruptcy attorney to help you out.
After you have filed for bankruptcy, it would be best to notify your ex-partner about it. Then, inform him/her that you still intend to continue paying child support. Your attorney can do this on your behalf. This will prevent your ex-partner from raising any objections to your bankruptcy application.
Note that your ex-partner falls into the list of your creditors. As a creditor, your ex-partner has the power to object to your bankruptcy application. You will prevent him/her from objecting to your application if you notify him/her about it and your intention to continue paying child support.
Also, you should notify the California Child Support Services Agency. Again, your attorney can do this on your behalf. The agency will take note of your bankruptcy application and your intention to continue making child support payments.
What the Bankruptcy Trustee will do After you have filed for Bankruptcy
The bankruptcy trustee is mandated under the law to do certain things after you have filed for bankruptcy as a noncustodial parent. First, the bankruptcy trustee will convene a 341 meeting of creditors. The bankruptcy trustee will request you to attend this meeting.
The bankruptcy trustee will ask you to fill in a certain form at the meeting. This form asks for your personal details, including your residential address and employment information. You will also be expected to fill in information about your child support obligations, including details of your ex-partner and how much you owe him/her for child support.
Then, the bankruptcy trustee will use the information you provided in the form to contact your ex-partner and the California Child Support Services Agency. Upon contacting them, the bankruptcy trustee will inform them about your bankruptcy application and their right to continue receiving child support payments.
Note that the bankruptcy trustee has reporting obligations to the California Child Support Services Agency. He/she has a legal obligation to make frequent reports to this agency about your child support payments during your bankruptcy.
Once you have filed for bankruptcy and the court approves your application, the bankruptcy trustee will automatically take charge of administering your estate. At this point, the bankruptcy trustee will be well-versed with the debts you owe. With your help, the bankruptcy trustee will do his/her best to repay your creditors. If you have child support arrears, the bankruptcy trustee has a legal obligation to clear them before repaying any other creditors you may owe.
Does Automatic Stay Apply to Child Support?
Once you file for bankruptcy, the court will grant you an automatic stay. Simply put, an automatic stay is a court order stopping all your creditors from doing anything against you to recover their debts.
For instance, before you file for bankruptcy, one of your creditors may have instituted a lawsuit against you. An automatic stay stops these legal proceedings from taking place during your bankruptcy. As a result, you get to protect yourself from losing your assets.
However, automatic stay does not apply to child support. This means that if your ex-partner had instituted any legal proceedings to recover child support arrears, these proceedings would continue even though you have filed for bankruptcy.
Particularly, the automatic stay will not apply to any of the following child support legal proceedings:
- Legal proceedings to modify child support orders
- Legal proceedings to enforce payment of child support arrears
- Legal proceedings to collect child support
- Legal proceedings to establish child support
- Legal proceedings to withhold income payable as child support
Besides legal proceedings for child support, there are other lawsuits that an automatic stay cannot stop from continuing. For instance, an automatic stay does not apply to criminal proceedings. Let's say you are a defendant in a lawsuit involving fraud. The legal proceedings of this lawsuit will continue even if you have been granted an automatic stay.
Child Support Debt is a Priority Debt in Bankruptcy
As a parent, you have a legal obligation to provide for your child financially. Filing for bankruptcy does not change this.
Courts in California will always look out for the child's best interests. Therefore, if you owe child support, the bankruptcy trustee will always treat it as a priority debt.
Priority debts are debts that the bankruptcy trustee will always repay first, i.e. on a priority basis, before repaying your other creditors. Child support arrears fall into the category of priority debts.
If you’ve filed for chapter 7 bankruptcy, the bankruptcy trustee will sell your non-exempt assets. Then, he/she will use proceeds from this sale to repay your creditors. However, before repaying your creditors, the bankruptcy trustee will pay your child support arrears.
Likewise, in a chapter 13 bankruptcy, the bankruptcy trustee will treat child support arrears as a priority debt in your repayment plan. He/she will ensure you first pay child support before repaying your other creditors.
Note that you will still be required to pay child support first even if you owe back taxes. Child support debt is normally considered a priority debt over all other debts, including tax debt.
Child Support Debts are not Dischargeable Debts in Bankruptcy
Once you’ve filed for bankruptcy, the court will take some time to review your application. If your application is successful, the court will issue an order to the bankruptcy trustee to administer your estate.
Then, you and your bankruptcy trustee will work together to ensure you repay most of your creditors and get back on track in your finances. The court will discharge all your unpaid debts at the end of the bankruptcy period. This will give you a chance to start over afresh.
However, child support debt is not a dischargeable debt in bankruptcy. Remember, the bankruptcy trustee will give it priority treatment over other debts. However, if you still happen to have accrued child support arrears at the end of your bankruptcy, the court will not discharge it. This means you will still remain liable for these arrears, and your ex-partner can use any legal means to recover them.
How a Chapter 7 Bankruptcy Affects Child Support
Remember, if you file for chapter 7 bankruptcy, the bankruptcy trustee will sell your non-exempt assets. Then, he/she will use the proceeds from the sale to repay your creditors. However, the bankruptcy trustee will first pay any child support arrears you may have.
The bankruptcy trustee, with your help, will do his/her very best to clear most of your debts. At the end of the bankruptcy period, the court will discharge any unpaid debts you may owe. However, child support arrears are not dischargeable debts.
You will still be expected to pay child support even after successfully filing for chapter 7 bankruptcy and receiving a discharge. If you don’t pay, your ex-partner can use any legal means to recover child support arrears, including selling any assets you had exempted while filing for chapter 7 bankruptcy.
Additionally, note that in a chapter 7 bankruptcy, any income you receive after filing for bankruptcy is not considered part of the bankruptcy estate. Therefore, the bankruptcy trustee cannot use this income to repay your creditors. However, if you owe child support, the court may issue an order to the bankruptcy trustee to use this income to clear your child support arrears.
How a Chapter 13 Bankruptcy Affects Child Support
If you file for chapter 13 bankruptcy and the court approves your application, you will be expected to come up with a debt repayment plan. Simply put, a debt repayment plan is a schedule showing how you will clear your debts. The bankruptcy trustee must approve this debt repayment plan.
If you have child support arrears, you must include them in your debt repayment plan. Remember, child support debt is treated as a priority debt in bankruptcy. When approving your debt repayment plan, the bankruptcy trustee will ensure you have prioritized clearing your child support arrears. You will be expected to clear your child support arrears first before repaying any other creditors you may have.
Unlike in chapter 7 bankruptcy, where income earned after you have filed for bankruptcy does not form part of the bankruptcy estate, in a chapter 13 bankruptcy, any income you earn after filing for bankruptcy is considered part of the bankruptcy estate. You will be expected to use this income to repay your creditors and clear child support arrears.
The court will expect you to adhere strictly to your repayment plan. In most cases, you will be expected to clear your debts within 3 – 5 years.
After the end of the bankruptcy period, you will receive a discharge. You will no longer be liable for any of your unpaid debts. However, if you still owe child support, you will be expected to clear it since it is considered a non-dischargeable debt.
Also, note that in a chapter 13 bankruptcy, you can exempt some of your assets. This will stop your creditors from selling any of them to recover their debts. However, if you owe child support, your ex-partner can apply to the court for an order to sell these assets to recover child support arrears.
Choosing between Chapter 7 and Chapter 13 Bankruptcy
You know that you can only opt for two types of bankruptcy in California: chapter 7 and chapter 13. You may wonder which type of bankruptcy would be ideal for your situation if you owe child support.
Remember, you are still expected to pay child support regardless of the type of bankruptcy you’ve chosen. However, as explained earlier in this article, the type of bankruptcy you’ve chosen determines how you will make your child support payments. In a chapter 7 bankruptcy, the bankruptcy trustee will sell your assets to clear your child support arrears. On the other hand, in a chapter 13 bankruptcy, you will be expected to treat child support debt as a priority debt in your repayment plan.
It may be difficult to choose between chapter 7 and chapter 13 bankruptcy. This is why it would be best to consult a bankruptcy attorney. A bankruptcy attorney is best placed to advise you on which type of bankruptcy is ideal for your situation.
When you consult a bankruptcy attorney, he/she will analyze your overall financial situation, including all the debts you may have and the child support arrears you have accrued. Then, your attorney will advise you whether you should file for either chapter 7 or 13 bankruptcy.
Paying Child Support After Receiving a Bankruptcy Discharge
If you have received a bankruptcy discharge, it is advisable to continue paying child support promptly. If you don’t and your arrears accumulate, your ex-partner can sue you for recovery.
Your ex-partner can use any legal means available to collect child support arrears. For instance, he/she can make an application to the court for an order withholding part of your income and using it for child support. Or, he/she can apply to the court for an order for attachment and sale of your property.
Can you Modify your Child Support?
As a parent, you may face financial difficulties. For instance, you may get a huge pay cut at your workplace. Or your business may incur a considerable financial loss. In such instances, you may want to modify your child support.
To modify your child support, you need to apply to the court for a modification order formally. The judge will need you to prove the financial difficulties you are facing. Then, he/she will make an appropriate modification order, depending on your financial situation. This will significantly reduce the amount of money you are expected to pay as child support.
Note that you can still modify your child support even after you have filed for bankruptcy. However, this modification will not apply to child support arrears you had accrued before filing for bankruptcy. The court will still expect you to pay the full arrears. The modification order will only apply to child support arrears going forward.
How Bankruptcy Affects Alimony Payments
If you owe child support, you may also be owing alimony. In that case, you may wonder how filing for bankruptcy affects alimony payments.
In California, alimony is treated just the same way as child support. Therefore, filing for bankruptcy does not in any way affect alimony payments. You will still be expected to pay alimony promptly.
Just like child support, alimony is categorized as a priority debt. The bankruptcy trustee will ensure you pay off any alimony arrears you may have before repaying any of your creditors.
Additionally, alimony arrears are considered non-dischargeable debts. Your ex-spouse can still move the court to recover alimony arrears after you've received a discharge. He/she can also make an application to the court for the attachment and sale of your property to collect these arrears.
If you are facing financial difficulties, you can apply for an alimony modification order. This will greatly reduce the amount of money you will be required to pay as alimony. However, this modification order will only apply to alimony payments going forward, not alimony arrears you accrued before filing for bankruptcy.
Find a San Diego Bankruptcy Attorney Near Me
Navigating bankruptcy while owing child support is difficult. We at San Diego Bankruptcy Attorney are here to help you overcome this challenging situation.
Call us today at 619-880-5474 for a free consultation. We will help you successfully navigate your bankruptcy journey so that you can get back your financial freedom.
