According to the US Census Bureau, and their latest full year of researched data on child support payments (2007), of the $34 billion dollars in child support that was owed, nearly 62% of it was reported as received by the end of the year. What does that tell us? Well, it means that the United States Family Court system puts an extremely high priority and value on a parent’s child support obligation. This is a good thing, but if you believe that bankruptcy absolves your child support obligations, then this might be a sobering moment for you. Let me explain what happens with child support during bankruptcy.
Domestic Support Obligation
Child support is classified as a Domestic Support Obligation (DSO), and is therefore not protected under the umbrella of bankruptcy; it is referred to as a non-dischargeable debt. This applies to past, present, and future support payments. In addition, the “automatic stay” technique cannot halt or delay the collection efforts of DSOs. Nationally, you will find the same regulations, even though different jurisdictions have their own terminology for it.
In the Nature of Support
Some debts related to your child can also be ineligible if they are debts accrued “in the nature of support”. This can include things like medical expenses for your child, educational expenses, etc. However, the laws are not so black and white on this issue as far as determining if a debt is or isn’t in nature of support. A judge will decide if it is, and the process is tedious and complex. This is where I come in; and since I specialize in bankruptcy, I know all the little loopholes and corners we can cut on your behalf, but I can only do that if you take the next step and call me to make an appointment for a consultation.
Child Support in Chapter 7 & Chapter 13 Bankruptcy
If you declare Chapter 7 bankruptcy, then any assets acquired by the court will pay for child support related debts before almost any other obligation. In a Chapter 13 bankruptcy, child support arrears are treated with the same priority status in the debt repayment plan you make with the court. Remember to keep making your current and future child support payments throughout your bankruptcy, and do so on time, or the court will cancel your approved debt repayment plan.
Can You Discharge Child Support Payments If the Debt Was Sold to Organizations Like Support Kids®?
Absolutely not. This is yet another myth, a sub-myth of the main myth, which is circulated around the web and from person to person. It does not matter who buys the debt. The nature of the debt is child support, so it cannot be discharged. The Pope could buy the debt, and it still would not matter. This is why you need my assistance, so you do not make life-changing decisions based on bad information. Once the stress of being in debt lifts, making child support payments will be easier than ever.
For more information about how a bankruptcy filing will effect your child support obligations or entitlement, please reach out to Christie D. Arkovich, P.A. for a free consultation. Sometimes, creative solutions are available to benefit the family as a whole.