How Does Bankruptcy Affect Child Support?

If you are struggling with a lot of debt and cannot afford to pay your bills, you may have already considered bankruptcy as an option. While bankruptcy should always be a last resort, it can clear your financial slate and give you a fresh start. Before filing, it is critical to understand what types of debts you can discharge, or eliminate, through bankruptcy. This is particularly true when it comes to certain types of debt, such as child support. Below, our Orlando bankruptcy attorney explains if you can discharge child support.

Addressing Child Support in Chapter 7 Bankruptcy 

Chapter 7 is one of the most common types of bankruptcy filed in Florida. In this type of bankruptcy, you can discharge most or all of your debt. Chapter 7 is also known as a liquidation bankruptcy because some of your assets may be sold in order to repay creditors a portion of your debt. There are certain types of debt you cannot discharge in Chapter 7 bankruptcy, including tax debt and overdue child support payments. You cannot discharge child support during Chapter 7 bankruptcy because it is the child’s right to receive it, regardless of your financial situation.

Child support is also considered a priority debt, meaning it is one of the first to be addressed during bankruptcy proceedings. Due to this, more of your property may be sold in order to repay the overdue amount.

One of the requirements when filing Chapter 7 bankruptcy is the means test. You must pass this test and show that you do not have sufficient income to repay your debts. If you cannot pass the means test, or you need a better option to manage your overdue child support payments, you may choose to file Chapter 13 bankruptcy instead.

Addressing Child Support in Chapter 13 Bankruptcy 

Like Chapter 7, Chapter 13 bankruptcy also does not allow you to discharge your overdue child support payments. However, Chapter 13 is vastly different from Chapter 7.

During Chapter 13 bankruptcy, the majority of your debt is not discharged. Instead, it is reorganized into a repayment plan. This is why Chapter 13 bankruptcy is also known as a reorganization bankruptcy. You can include overdue child support payments in your repayment plan. These plans extend between three to five years, so it can make repaying the overdue amount more affordable. It is important to note, though, that the repayment plan will only include overdue child support. You will still have to pay current and upcoming payments, as well as making payments towards the repayment plan.

Our Bankruptcy Attorney in Orlando Can Help with Your Case 

If you are considering bankruptcy, you need the help of an Orlando bankruptcy attorney to guide you through the process. At Anderson & Ferrin, P.A., our experienced attorney can review the facts of your case, advise on what type of bankruptcy is right for you, and provide sound representation from the start of your case until it is finalized. Call us now at 407-412-7041 or contact us online to schedule a consultation and to get the legal help you need.

Sources:

law.cornell.edu/uscode/text/11/chapter-7

uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics