Under federal law, individuals have the right to request bankruptcy protection when they have debts that they have no reasonable expectation of paying. However, different types of debts may be treated differently in a bankruptcy case. To find out about your specific situation, which may include past due child support, you can consult a bankruptcy attorney. An attorney is your best source of information, since bankruptcy laws are subject to change over time.
Automatic Stay
The automatic stay is one of the benefits of filing for bankruptcy. Once the petition is filed, the stay automatically goes into effect. It prevents creditors from contacting you or taking any collections efforts against you. However, it may apply to child support debts differently. If you file for Chapter 7, you might still be subjected to collection actions for past due child support filed against any property that isn’t part of the bankruptcy estate—including wages earned after the filing date. It’s a little different for Chapter 13 cases, in which earnings are included in the bankruptcy estate. This means that a creditor, including a child support agency, must petition the judge to lift the automatic stay.
Debt Discharge
Bankruptcy treats past due child support as a priority debt. This means it is not dischargeable. This is true regardless of whether you file for Chapter 7 or Chapter 13.
Ongoing Payments
Whether you file for Chapter 7 or 13, you must continue to meet your ongoing child support obligations. If you’ve filed for Chapter 7, you won’t have the protection of an automatic stay. However, Chapter 7 may help you meet your obligations, since it can discharge other debts and free up income that can be used for child support. If you’re in a Chapter 13 repayment plan, the plan will only reorganize child support debt that was past due. You must continue to make your ongoing payments. Bankruptcy treats child support as a priority debt, so it must all be paid off before you can receive a discharge.
You can get the answers to all of your questions during your consultation at Cutler & Associates, Ltd. We are a bankruptcy law firm serving Schaumburg, Aurora, and the greater Chicago area. You can call (847) 961-4572 to request an appointment with one of our knowledgeable and experienced bankruptcy lawyers.