Have you fallen behind on your child support payments? Do you now owe thousands of dollars and you’re not sure how you’ll ever get caught up? Since child support debt is not retroactive, meaning the court cannot go back and reduce what a parent owes, it can be quite stressful for noncustodial parents.
We frequently have clients who are noncustodial parents with child support debt. It’s not unusual for them to ask us if child support debt can be included in bankruptcy. If you’re wondering the same thing, you have plenty of company. If you owe back child support, neither Chapter 7 or Chapter 13 can discharge your past-due child support. But, a Chapter 13 bankruptcy can help you catch up on what you owe.
Bankruptcy Does Not Wipe Out Child Support Debt
Due to concerns over children’s best interests, families, and public policy, Congress decided that child support is so important for children’s welfare, that it cannot be discharged in bankruptcy. As a result of Congress’ decision, child support has been labeled a “priority debt” for bankruptcy purposes. It cannot be erased in Chapter 7, and it cannot be reduced or discharged in any form of bankruptcy.
If you decide to file a Chapter 13 bankruptcy and you owe child support, you will be required to pay off your child support arrears in full through your Chapter 13 repayment plan. While this may be disappointing at first, it can have its benefits.
In most situations, when a parent has a child support obligation, it actually reduces the amount he or she has to pay to their unsecured creditors (think credit card companies) in their Chapter 13 plan. Since most bankruptcy filers would rather see their money go to their children than creditors, they like the fact that filing a Chapter 13 can help them catch up on their back-child support while discharging less important debts, such as those involving credit cards with hefty late fees, interest and penalties.
Note: Before a noncustodial parent can receive a Chapter 13 bankruptcy discharge, they must be current on all of their child support obligations. If a Chapter 13 debtor missed one or more of their child support payments during their Chapter 13 plan, they have to come current before the bankruptcy court will give them a discharge.