Does Bankruptcy Affect Child Support Obligation?
Many parents who receive child support payments from the other parent can attest to how frustrating it can be when the paying parent is not consistent with their payments. Payments arrive late or sometimes not at all. It is not uncommon in these situations for an arrearage to begin building up, resulting in the need for the custodial parent to pursue ways to collect the back support. If you need legal guidance, do not hesitate to contact experienced child support lawyers Plano, TX turns to from Scroggins Law Group to assist you with your case.
What happens when a parent who is responsible for child support payments files for bankruptcy? Does this have any impact on their child support obligation or any back support they may owe when they file?
Types of Bankruptcy
There are two types of personal bankruptcy that people can file for. The first, chapter 7, wipes out any and all debt the person has by selling certain assets they own to pay the debt off. Any debt that is left over is then canceled out.
With chapter 13 bankruptcy, the debt is not wiped out. Instead, the person’s debt is reorganized and a new schedule and amount of payments are set up based on the person’s income. The person makes these payments for approximately three years and once that time is up, any debt that may still be left over is eliminated.
Bankruptcy and Child Support
Neither chapter 7 nor chapter 13 bankruptcy relief eliminates a person’s child support obligation. Child support is classified as a priority debt, such as income taxes, and priority debts cannot be eliminated in bankruptcy filings. The other stipulation with priority debt is that the person filing for bankruptcy must be caught up with any back payments. So if the person owes back child support, their bankruptcy filing will likely be rejected.
The person is also required to continue to make their payments throughout the entire bankruptcy proceedings. Since the majority of debt obligation the person has is put on hold during this process, it should make it easier for them to pay their child support obligation since they will not be required to pay their other debts.
Child Support Modification
In some situations, the person who files for bankruptcy may also file for a child support modification to lower their payments. This can only be done if there has been a substantial change in their income, not just because they filed for bankruptcy.
For example, let’s say the paying parent lost their job and was forced to take another position at a pay rate much lower than what they were earning at their previous position. It was this change that caused the parent to fall behind in all their bills which resulted in the bankruptcy filing. In this situation, the parent could petition the court to lower their child support obligation since they were earning much less than when the original child support order was issued.
If the parent is still at the same job making the same income and the bankruptcy filing was a result of not spending their money wisely, they would not have grounds for filing a request for modification and the judge would likely deny the motion.