Issues surrounding child support and divorce can be contentious, but when bankruptcy is involved things can become even more complicated. Regardless of the circumstances, it is always a good idea to consult a seasoned attorney to figure out your options if you are facing issues surrounding bankruptcy and child support. The best bankruptcy lawyers will take the time to answer your questions and help you understand your rights and responsibilities.
Bankruptcy and Child Support
Debts are divided into two general categories when you file for bankruptcy. Dischargeable debt can be eliminated, while non-dischargeable debt cannot. Some examples of dischargeable debt include medical bills, credit card debt, car loans and mortgage payments. Child support and alimony arrears are considered non-dischargeable debt in both Chapter 7 and Chapter 13 bankruptcy. Child support is also considered a “priority debt,” which means that repayment often takes precedence over other non-dischargeable debt like income tax debt.
Chapter 7 vs. Chapter 13: How Each Type of Bankruptcy May Affect Child Support Payments
When you file for bankruptcy, an automatic stay is usually placed on any collection actions against you. However, if you file for Chapter 7, your post-filing income is not considered part of the bankruptcy estate. This means that a stay will not halt collection of child support payments. If you fall behind on your support obligations, a creditor (whether it is your child’s guardian or the state) can sue you to collect them.
Filing for Chapter 13 also triggers an automatic stay, but your post-filing earnings are considered part of the bankruptcy estate. This means that before someone can sue you for child support, they would have to file a motion to lift the stay. However, once it is lifted you can be sued. To ensure you keep the benefit of the stay, making timely, full payments according to your repayment plan is critical.
Regardless of whether you are the person who receives or pays child support, a good family law attorney should know how bankruptcy may affect payments and can advise you on the most effective course of action to reach a fair resolution.
Do Bankruptcy and Child Support Affect Custody?
Although filing bankruptcy or getting behind on child support payments does not affect your right to see your children, finances can play a part in the amount of time each parent spends with their children. When making decisions about custody arrangements, the court’s main concern is always the best interest of the child. If your financial situation renders you unable to provide for your children’s basic needs such as food, clothing and housing, a family court judge may give primary custody to the parent or guardian who can adequately provide these things.
If you have an existing custody agreement, simply filing for bankruptcy cannot alter this arrangement. If you or your child’s other parent wishes to modify a custody or child support agreement, you must file a petition with the court that made the initial determination.
Find a Law Firm that Can Handle all Aspects of Your Case
To ensure your rights are protected, it is important to find a full-service law firm in West Chester that handles bankruptcy cases and issues surrounding child support, alimony, custody and other family law matters. If you are filing for business bankruptcy, having an experienced business lawyer on your team is also a must.