How Does Bankruptcy Affect Alimony and Child Support?

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Alimony and child support are categorized as “priority debts,” meaning they cannot be discharged through bankruptcy. Here’s a closer look at how Chapter 7 and Chapter 13 bankruptcies affect these obligations and the potential legal consequences of falling behind.

Chapter 7 Bankruptcy and Alimony/Child Support

Chapter 7 bankruptcy, commonly known as liquidation bankruptcy, is intended to eliminate unsecured debts such as credit card and medical bills. While it may provide relief from many financial burdens, it does not discharge alimony or child support. This is because such obligations are categorized as “priority debts,” meaning they have priority over other types of debt. The law explicitly prohibits the discharge of these family support payments in Chapter 7 bankruptcy.

If an individual falls behind on these payments, their obligations remain intact even after the bankruptcy process. The courts will require continued compliance with existing court orders, and failure to meet these obligations can lead to serious legal consequences.

Chapter 13 Bankruptcy and Alimony/Child Support

Chapter 13 bankruptcy offers a structured approach to managing debt by setting up a repayment plan. Unlike Chapter 7, it reorganizes debts, allowing the debtor to retain their property and gradually pay back creditors over three to five years.

While alimony and child support cannot be discharged, Chapter 13 can help restructure payment schedules. For individuals struggling with arrears, the Chapter 13 plan can consolidate overdue payments into the repayment plan, allowing for a more manageable timeline to catch up. This prevents immediate legal actions like wage garnishment or contempt charges while helping to stabilize one’s finances.

Legal Consequences of Falling Behind

Missing payments for alimony or child support can have severe consequences, regardless of the bankruptcy chapter filed. Courts take family support obligations very seriously, and non-compliance can result in wage garnishment, asset seizure, and even contempt of court charges.

  • Wage Garnishment: A legal order may require your employer to withhold a portion of your wages and send them directly to the custodial parent or state agency.
  • Asset Seizure: Courts may order the seizure of valuable assets to settle past-due obligations.
  • Contempt of Court: Failure to comply with a court order can lead to contempt charges, resulting in fines or jail time.

Consulting a Bankruptcy Attorney

Facing bankruptcy with outstanding alimony or child support obligations requires careful planning. It’s crucial to consult a bankruptcy attorney to understand your legal obligations, available options, and how bankruptcy will affect your financial responsibilities. An experienced attorney can help assess the best course of action, whether that involves Chapter 7 or Chapter 13, while ensuring your family’s needs are protected.

In Summary

Chapter 7 bankruptcy will not discharge alimony and child support payments, and Chapter 13 can only help restructure past-due amounts into a manageable plan. Despite the challenges of financial hardship, it’s essential to remain compliant with these obligations to avoid severe legal consequences.

Contact us to discuss your specific situation and find the best way to manage your financial challenges.

Author picture
Author picture

Jeffrey L. Wagoner

President

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