It’s not a surprise to hear that people often find themselves in difficult financial situations. Sometimes this is the result of their own actions and sometimes not. Regardless of how you got into financial straights, bankruptcy can be a tool to help you get some breathing room. The decision to consider bankruptcy should not be taken lightly — you should seriously consider speaking with a South Atlanta bankruptcy lawyer first.
Child Support is Non-Dischargeable in Bankruptcy
Child support obligations are what’s called a non-dischargeable debt. This means that child support obligations are not erased by filing bankruptcy. Because these types of debts are to support the health and well being of your child, they must still be paid even during and after bankruptcy proceedings.
However, there are options to alleviate your situation…
In most circumstances, when you file bankruptcy, the court issues a stay. This means creditors can no longer come after you for the debt you owe to them. But because child support obligations cannot be discharged in bankruptcy, that debt is also not subject to the stay. So the stay that occurs in Chapter 7 or Chapter 13 does not prevent the court from bringing an action against you for your child support obligations.
However, filing Chapter 13 bankruptcy can help you get caught up on your child support obligations. Filing bankruptcy under Chapter 13 allows you the opportunity to organize your debts and pay them back using a structured payment plan. Past due child support obligations would be included in this plan. But note that in order to receive a discharge in your Chapter 13 bankruptcy case, you must be up to date on all of your child support payments and be able to prove that to the court.
Filing bankruptcy under Chapter 13 can actually reduce the amount you will owe to unsecured creditors, like credit card companies. Because your child support arrears are calculated into the total amount of debt that needs to be organized, and because that debt cannot be discharged, your overall debt load can be reduced. In other words, you will be paying money to your child instead of creditors.
A New Financial Path
While neither Chapter 7 or Chapter 13 will wipe out your child support obligations, both can provide you a path to reduce your overall debt. By filing bankruptcy and discharging your other debt, more of your income is freed up to pay your child support obligations. For many, this is a positive outcome as debts are removed and children are properly cared for.
The intersection of family law and bankruptcy law is a convoluted one. There are many moving pieces and lots of things can quickly go wrong. That is why you need the seasoned advice of an experienced attorney. Bankruptcy is usually a decision of last resort and while you don’t want to be in this situation, using the right attorney to help you navigate through the complex process is of utmost importance. You don’t have to go it alone. Contact one of our Georgia bankruptcy lawyers today to discuss your bankruptcy and child support options. We look forward to working with you.
Posted in: Bankruptcy