If you are a child support obligor (meaning, you pay child support) and you are reading this because you are wondering, does bankruptcy clear back-owed child support, the simple answer is no. But bankruptcy might be a solution for you in other ways, by discharging and/or reorganizing other debt and making your monthly child support payment more affordable.
- Does bankruptcy clear medical debt? Yes.
- Does bankruptcy clear credit card debt? Yes.
- Does bankruptcy clear student loans? Rarely.
If you are a child support obligee (meaning, you receive child support) and you are wondering whether child support received is considered income for bankruptcy purposes, it probably is. Speak with an experienced local bankruptcy attorney about this.
If you need a bankruptcy attorney in Philadelphia or Delaware County, contact The Law Offices of David M. Offen today — your initial consultation is free of charge!
In the meantime, you can find out more about filing for bankruptcy in PA in this article.
Bankruptcy and Child Support Arrears
For reasons of public policy, Congress provided an exemption for child support arrears (i.e., accumulated missed payments) in bankruptcy, categorizing child support as a “priority debt” that cannot be discharged. As a priority debt, child support arrears are paid before other general unsecured debts like credit card debt and medical debt. Child support arrears also are paid before most other priority debts — including back-owed taxes.
Can interest on child support be discharged?
No. If interest accrues on child support arrears in your state, it must be paid either through your Chapter 13 plan, or outside your Chapter 7 bankruptcy case.
Chapter 7 Bankruptcy and Child Support Payments
While the “automatic stay” stops most creditors from attempting to collect a debt you owe, Chapter 7 does not “stay” or stop the child support obligation because an obligor’s post-filing income is not part of the bankruptcy estate. So, after filing a Chapter 7 bankruptcy petition, an obligor must continue to pay child support and is still obligated to pay any child support arrears.
Chapter 7 does not stay any legal proceeding to either establish, modify, or collect child support — meaning, a child support obligee can file a motion to modify or to enforce a child support order without first obtaining permission from the bankruptcy court.
Child Support Modification and Chapter 13 Bankruptcy
Chapter 13 bankruptcy will not itself stop child support — neither the obligation to make continuing payments post-petition (after filing bankruptcy) nor the obligation to pay pre-petition (before filing) arrears.
In other words, if an obligor files a Chapter 13 petition, he or she must continue to make child support payments and is still liable for child support arrears. However, he or she can provide for payment of any pre-petition child support arrears over a 3- or 5-year plan. Chapter 13 can help an obligor get caught up with child support, and get his or her other unsecured debt discharged once the Chapter 13 plan is complete.
If an obligor files Chapter 13 bankruptcy and so has an additional monthly payment in the form of a plan payment to make, he or she might be eligible for a modification (decrease) in child support based on a significant change in circumstances. If a modification is granted, however, this will not change the amount in arrears that the obligor must pay, with interest, through his or her Chapter 13 plan.
Unlike Chapter 7, in Chapter 13 the obligor’s post-filing income is considered part of the bankruptcy estate. So if an obligee wants an increase in child support or wants to initiate a collection action to collect any past-due post-petition child support, he or she must file a motion for relief from the automatic stay with the bankruptcy court and get the court’s permission to do so.
What Can I do about Child Support Debt?
You can’t discharge child support debt in bankruptcy. But getting other debt discharged in bankruptcy will free up more of your income so that you can more easily afford to pay child support.
One unfortunate side effect of a bankruptcy discharge for child support obligors is that, if the obligor has less debt and therefore less or fewer monthly bills to pay after his or her bankruptcy, the obligee might file a motion for modification (increase) of child support because the obligor’s financial circumstances have significantly improved.
Family law is state law and varies from state-to-state, and the interaction of family law with bankruptcy law can be very nuanced. Be sure to discuss your bankruptcy options and all of the possible effects of bankruptcy on your finances, including your child support obligation, with an experienced local bankruptcy attorney prior to filing.
