No matter how tight money is, taking care of your children is always a priority. If you’ve found yourself in more debt than you can handle and are also responsible for child support, you may be wondering what filing for bankruptcy will mean for your situation. Will support payments be included in bankruptcy? Or will they be reduced? I can help you solve all these important questions. One thing to note is that child support cannot be discharged through any type of bankruptcy.
Chapter 7
Although filing any chapter of bankruptcy will start the automatic stay and then you can stop making payments on unsecured debts, you will still need to keep up with your payments (as well as payments on secured debts, if you want to keep your property). ) Bankruptcy of any kind will not stop your child support and will not affect any court proceeding to establish or change your support. All priority debts, like child support, must be paid in full, on time each month, and if you don’t make the payments, you could be sued. Filing a Chapter 7 could result in some of your non-exempt assets being taken and sold to pay off creditors, but we will use the many exemptions available to protect as many of your assets as possible. If the court seizes part of your property, the trustee will decide which creditors will receive the payment and how much. Child support is usually the top priority.
Chapter 13
One of the benefits of choosing a Chapter 13 bankruptcy is that you can include any child support arrears in your payment plan as a priority debt. We will design your plan to include your full child support payments with any arrears spread out over your 3-5 year plan. Making your child support payments can reduce the total debt you will pay in a Chapter 13. Priority debts are paid first, and any remaining available income goes toward other lower-priority or unsecured debts. In some cases, when there is little disposable income left, unsecured debts are not paid at all before they are paid off.
It is imperative that you stay current with your Chapter 13 repayment plan; otherwise, your creditors may request “relief from the automatic stay.” If the court approves it, you will need to start making full payments on the debt right away. You will need to stay current with your child support payments through the end of the debt period, or your bankruptcy discharge could be delayed.
make a plan
Of course, you want to make sure that your children are well provided for and that they are willing to make the necessary sacrifices to make that happen. If you need to file bankruptcy, the court will look at your overall financial situation, which could result in a change in your child support payments. You can also free up enough space in your budget through bankruptcy discharge to make your payments easier to manage. No matter what your situation is, we can work together to make a plan that works for you.