You may be considering bankruptcy to give yourself a fresh start and wipe out all those existing debts. You may owe a lot of child support and you may be wondering if you can wipe that out too. Probably not.
If you plan to file for Chapter 7 or Chapter 13 bankruptcy, it’s important to understand that you cannot get rid of child support obligations or child support through bankruptcy. This rule extends to any type of domestic support obligation.
What is a Domestic Support Obligation?
A domestic support obligation is child support, alimony, or any other debt that is in the nature of child support, maintenance, or alimony.
A domestic support obligation is non-dischargeable if it was established: through a separation agreement, divorce, or property settlement agreement by a court order authorized by law, or by a child support enforcement agency (or other government agency) determination.
How Child Support is Treated in Chapter 7 Bankruptcy
In Chapter 7 bankruptcy, you are able to wipe out (discharge) most of your debts. In return, you must give up non-exempt property. The bankruptcy trustee sells this property and uses the proceeds to pay your creditors.
Not all debts are dischargeable, however. The bankruptcy code carves out some types of debts that you will continue to owe despite your Chapter 7 bankruptcy. Domestic support obligations are one of the types of debts that cannot be wiped out in bankruptcy.
How Child Support is Treated in Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, you keep your property and repay your debts through a Chapter 13 repayment plan. Some debts must be paid in full. Others might be paid in part — the remainder will be discharged at the end of the repayment period.
Here’s how domestic support obligations are treated in Chapter 13 bankruptcy:
Domestic support obligations owed directly to a child or ex-spouse must be paid in full through your Chapter 13 repayment plan.
Domestic support obligations owed to a government child support collection agency do not have to pay in full during the life of your repayment plan. However, any amount remaining after your plan is finished is not discharged — you’ll still owe it. For example, if you owe $5,000 to a child support collection agency and you pay $2,500 through your plan, you will still owe the remaining $2,500 after you receive your Chapter 13 discharge.
Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site www.BankruptcyforTampa.com or call 727-254-1704.