If you are paying child support, you may be confused about the effect of a bankruptcy filing on your child support obligation. A bankruptcy filing generally protects the debtor from the collection actions by creditors, but Congress has not extended the same protections to child support issues. Under the bankruptcy laws child support is a “non dischargeable debt” which means that the obligation will survive the bankruptcy, regardless whether it is a current or past debt.
The bankruptcy automatic stay does not apply:
(1) to the establishment of a child support obligation;
(2) to the collection of child support from property that is not property of the estate; or
(3) to the withholding of income that is property of the estate for payment of a child support obligation under a judicial or administrative order or statute.
In “non-lawyer speak,” child support collection actions are generally not halted by filing bankruptcy. Additionally, filing a bankruptcy case does not stop a tax intercept for the payment of child support arrears.
Domestic support obligations, including child support obligations, receive top payment priority when funds are available to pay creditors in a Chapter 7 case. In a Chapter 13 case, child support arrears are paid through a “repayment plan” and are paid as a first priority. Support payments due after the bankruptcy filing date must be kept current or the debtor’s plan will not be confirmed, and the bankruptcy court will not issue a discharge in a case where child support is owed.
In addition to child support, debts that are “in the nature of support” (e.g. medical expenses, educational expenses, etc.) are ineligible for discharge. The bottom line is: child support obligations must be paid. Fortunately, the bankruptcy laws offer options to make the debtor’s payment burden more bearable. However, a debtor’s child support obligation is often a difficult legal situation that requires expert guidance. If you have a child support obligation and are considering filing bankruptcy, consult with an experienced bankruptcy attorney and discuss your options.