Can Child Support Be Included in Chapter 7?

Bankruptcy, Bankruptcy Advice, Chapter 13, Chapter 7 Bankruptcy0 comments

There are a lot of negative consequences associated with the failure to pay child support. Once arrearages reach certain thresholds, the paying parent will be denied a U.S. passport, their driver’s license can be suspended, their wages can be garnished, their tax refunds can be taken for child support, and funds can be withdrawn directly from their bank accounts. They can even be held in contempt of court and face jail time.

If you’re the non-custodial parent and you owe back child support, you may be wondering, “Can child support be included in bankruptcy?” For starters, let’s discuss child support and Chapter 7 bankruptcy. If you owe back child support, Chapter 7 cannot wipe out this debt like it does for other unsecured debts.

When debtors file Chapter 7, they experience immediate relief from the “automatic stay,” which halts all debt-collection activities, with the exception of child support actions. Unlike other debts, the Chapter 7 filing will not delay or stop lawsuits that try to collect from property that is not in the bankruptcy estate.

For example, property earned or acquired after the Chapter 7 filing is not considered part of the bankruptcy estate – including the debtor’s wages from employment. So, if you were to file Chapter 7 bankruptcy, the child support creditors could still go after any assets acquired after the filing date, including your regular wages.

Child Support is a ‘Priority Debt’

In Chapter 7 bankruptcy, certain types of debts are considered “priority debts.” Such debts include child support, spousal support, court-ordered fines, student loans, and victim restitution; these debts are NOT dischargeable in a Chapter 7. In other words, if you owe child support arrears, it will not be erased through Chapter 7 bankruptcy.

What about Chapter 13 bankruptcy? Can child support be included in that? Like a Chapter 7, child support is treated as a “priority debt,” even in a Chapter 13. While you cannot reduce the amount of child support you pay through a Chapter 13, child support debt can help reduce the amount of money you pay to other unsecured creditors. In effect, enabling you to get caught up on back child support. Usually, debtors would much rather see their money go to their children than to interest on credit card debt.

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