Parents falling behind on child support payments may be considering bankruptcy. Here’s what you need to know about how bankruptcy affects child support in California.
Debtors are discharged from certain debts when they file for bankruptcy, which means they are no longer required to pay them. However, child support debts cannot be discharged in bankruptcy, and so child support still must be paid. Bankruptcy, however, can actually make it easier for a person to pay back child support.
Related: Back Child Support Laws in California
The purpose and types of bankruptcy
Bankruptcy is a legal process, governed by federal law, that is designed to relieve debtors from crushing debts, as well as help creditors get the money that they are owed. People might want to consider bankruptcy if they are experiencing high debts and cannot find a way to escape them.
When a person files for chapter 7 bankruptcy (also known as straight bankruptcy), all of their non-exempt assets will be sold, and the money will be distributed to the creditors that are owed. In addition, the debtor will be discharged from most of their debts when filing for chapter 7. This means that they are no longer obligated to pay the debts, and the creditors can no longer seek out the money that they were owed.
Chapter 13 bankruptcy, on the other hand, is less severe. A person filing for chapter 13 (also known as the wage earner’s plan) must create a repayment plan that enables them to repay the debts in three to five years. This form of bankruptcy allows a person to keep their assets and pay off their debts in an organized manner using their income. After this period has ended, qualifying debts will be discharged.
Child support and bankruptcy
Both types of bankruptcy involve the discharging of debts, which can be a significant benefit to people who are struggling to escape massive debt. However, there are certain types of debts that cannot be discharged, and child support debts fall into this category. This means that bankruptcy cannot eliminate owed child support, nor can it eliminate future child support obligations.
While bankruptcy cannot eliminate owed child support nor eliminate future child support obligations, bankruptcy can still affect child support. Child support is considered a priority debt. This means that in the case of chapter 7 bankruptcy, child support debt is among the first debts to be paid back. Similarly, in chapter 13 bankruptcy, the repayment plan must include paying off owed child support. In order to receive a discharge at the end of the three to five-year period, the person who filed for bankruptcy must be current on all domestic support obligations. As such, if a parent who owes child support files for bankruptcy, it can actually be beneficial for the other parent.
FAQs about child support and bankruptcy in California
My ex-partner owes me child support and is considering filing for bankruptcy. Does this mean I won’t receive the child support that I’m owed?
Child support debts cannot be discharged in bankruptcy. Child support debts are considered priority debts, which means they will be among the first debts to be paid off in bankruptcy.
Related: Child Support Arrears: CA Family Code 17560
How does chapter 7 vs. chapter 13 bankruptcy affect child support?
Chapter 7 bankruptcy involves selling off all assets in order to repay debts. In this case, child support debts will be the first debts to be paid off. Chapter 13 bankruptcy involves a repayment plan that must involve repaying child support debts if applicable.
I’m extremely far behind on child support payments. Should I declare bankruptcy?
Declaring bankruptcy is a complicated decision that involves many aspects. While child support payments cannot be discharged by bankruptcy, bankruptcy can actually make it easier to pay back child support debts. Whenever a person is considering bankruptcy, they should absolutely contact a lawyer to survey all available options.
Related: Child Support FAQs in California
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If you or a loved one have any more questions about how bankruptcy affects child support in California, contact us. Get your free consultation with one of our experienced Child Support Attorneys today!