Will Filing for Bankruptcy Affect My Child Support?

The majority of parents prioritize their children’s needs above all other considerations. Nothing about declaring bankruptcy alters this. But what occurs if you give or receive child support and file for bankruptcy? What do you need to know about child support and bankruptcy? You can get help from a bankruptcy attorney in Kingston, NY.

Does Bankruptcy Discharge Child Support?

No. Like other court-ordered payments, child support is a priority debt. Child support is never discharged as a result of bankruptcy. When parents declare bankruptcy, they must still make their payments. This includes current and future debts, as well as past-due payments. You ought to keep getting compensation if you are a custodial parent.

Does the Automatic Stay in Bankruptcy Affect Child Support Payments?

A lot of people declare bankruptcy merely to benefit from the automatic stay. At least temporarily, the automatic hold prevents creditors from trying to collect a debt. This is a tremendous relief for those who regularly deal with aggressive debt-collection tactics. Even though they may eventually have to pay back the debt, the automatic stay provides them some time to reflect and plan their next move.

The automatic stay does nothing to stop the collection of child support payments, which is unfortunate or fortunate if you are the custodial parent receiving payments. Whether a person files for bankruptcy or not, the court’s child support order is still in effect.

It is crucial to comprehend how the bankruptcy chapter a person files under influences how the court handles child support cases.

A parent’s need to pay child support is not waived by either Chapter 7 or Chapter 13. However, it becomes a little bit more challenging for the custodial parent to collect after filing for Chapter 13. When someone files for Chapter 13 bankruptcy, their income for up to five years is included in the bankruptcy estate. To get the money owed, the recipient parent must ask to be exempt from the automatic stay. 

A Priority Debt is Child Support.

Child support is not only given priority over other payments but also over other debts that are also given priority. The court ensures that payments for child support are made before other debts with higher priority. If you are the paying parent, you will need to carry on paying after your case is over, including any back payments due. Back child support payments are included in your Chapter 13 bankruptcy payment schedule. During the three to five-year Chapter 13 plan, current payments are made from the borrower’s income. The liquidated assets cover back payments in Chapter 7.