Managing Child Support and Spousal Support Debt in Bankruptcy
If you’re struggling to keep your head above water financially, and a big part of your monthly outlay is for child or spousal support, you may have questions about whether you can use the bankruptcy laws to get some relief. Here’s an overview of your options.
Chapter 7 May Not Be Used to Discharge Family Law Debts
Under Section 507(a)(1), you cannot use a Chapter 7 bankruptcy filing to permanently discharge child support or alimony obligations. The only debts which take priority over these are the administrative costs of the bankruptcy filing. In addition, Section 523(a)(5) specifically states that domestic support debts are not dischargeable in Chapter 7. There are no exceptions.
Chapter 13 and Domestic Support Obligations
Child support and alimony obligations also receive priority in Chapter 13 reorganizations. You can reorganize domestic support arrearages in a Chapter 13 petition, but you must pay off all back support during the 3-to-5 year period of the bankruptcy. You must also keep current with any new or ongoing support obligations during the bankruptcy period. Failure to do so may cause you to lose all Chapter 13 protection. If your Chapter 13 reorganization has not been approved, you risk denial of confirmation of your plan, conversion to a Chapter 7, or dismissal of your case if you fall behind on current obligations.
Amounts due as part of a property settlement in a divorce case are generally not considered to be domestic support obligations under the bankruptcy law. While you cannot discharge property settlement debts outright in a Chapter 7 petition, such debts may be discharged in a Chapter 13 filing. You must make payments during the 3-5 year term of the Chapter 13 bankruptcy, but any amounts still due at the end of that time will be discharged.
Contact Heath, TX Bankruptcy Attorney Carrie Weir
I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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