The Basics of Child Support and Chapter 13 Bankruptcy

If you are considering bankruptcy, you are likely struggling to meet your financial obligations. When your financial troubles include child support or alimony on top of mounting bills and debts, you may feel stressed and overwhelmed. Simply not paying child support can land you in legal trouble, so it is not the best option. Bankruptcy can seem like the answer to your financial problems, but you should be certain that you know exactly what you will and will not achieve by filing bankruptcy before you proceed. Continue reading to learn about child support and chapter 13 bankruptcy.

Bankruptcy Limitations

While bankruptcy is intended to help you regain your feet financially, it will not wipe out all debts or enable you to have more disposable income right away. Among the debts that cannot be eliminated through bankruptcy is back child support. You can also choose to include in your plan payments for secured debts, such as your home or car if you do not want to lose the property in question. If you do not choose to include secured debt in your plan, then you will lose the property.

Your other debts, such as credit cards and student loans, will be paid out of the remainder of your disposable income. The law defines disposable income as your monthly income except or subtracting:

  • Child support received
  • Foster care payments
  • Reasonable costs of caring for yourself and any dependents
  • Charitable contributions up to 15% of gross income
  • Necessary finances to maintain a business, if applicable

In short, bankruptcy will still allow you the finances needed to supply the basics for yourself and your family, but there will be very few extras during your three to five-year repayment term. After that period of time, however, you will have your disposable income and can start over.

Paying Child Support 

When you are struggling to keep up with child support payments, you do have options before resorting the bankruptcy. The first step to ensuring that you can meet your child support obligations is to make sure that your required amount is correct. If you have recently lost your job, taken a pay cut, or experienced some other drastic change in your financial situation, you may qualify for a lowered child support amount. It is important to discuss this with an attorney, as it will not be automatically adjusted by your bankruptcy proceedings.

Whether or not you can have your support payments lowered, Chapter 13 bankruptcy requires that you create a payment plan for both your debts that will not be discharged by the bankruptcy and those debts that cannot be erased by bankruptcy. The law requires that you pay the full amount of back child support, alimony, taxes, and money owed to employees. This means that your payment plan will need to include both a payment toward your back child support and current regular payments.

Contact an Experienced Bankruptcy Attorney

If you have unpaid child support and find yourself unable to make ends meet, contact the experienced attorneys at Cornwell Law Firm. Our attorneys will help you create a plan that will ensure that your child support obligations are met. To learn more about child support and chapter 13 bankruptcy, contact us today for a free consultation.

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