How will bankruptcy affect my child support obligation?

  • By:David Bate

Bankruptcy Lawyer

 

Have you found yourself facing bankruptcy after you have made a court ordered financial agreement to your ex and your children? The following information is meant to help you understand the implications of bankruptcy and how that impacts your child support payments.

 

Bankruptcy – Let’s face it, there is a negative stigma to filing for bankruptcy. When an individual decides to declare, it means they have to admit that there is no other way of handling insurmountable debt. It is true that once declared, your credit will reflect the bankruptcy. In addition, it may be difficult to obtain a loan and if you do, the interest rates will likely be higher post-bankruptcy. However, many Americans have chosen the bankruptcy route and have survived and even thrived. Although you will still be required to pay child support payments from the past, current and future, you will clear up other debt that will allow for those payments to be honored.

 

There are two primary filing options when it comes to bankruptcy:

 

  •         Chapter 7 is the most common and will remain on your credit report for 10 years. This form of bankruptcy means a liquidation of unsecured debt- medical bills, credit card bills and personal loans. The liquidation process does not include child support as that type of financial obligation is considered a priority debt. Child support payments will likely take precedence over other priority debts (i.e., taxes and school loans).  
  •         Chapter 13 filing stays on your credit report 7 years. It is for the individual who finds themselves under significant financial stress but make a decent income. Chapter 13 includes a payment plan to get out from under that debt. As with Chapter 7, you will still be expected to honor past, present and future child support payments.

Child Support Obligation- As previously discussed, since child support is considered a priority debt, payments are still required despite filing for bankruptcy. Child support arrears refers to the amount you currently owe including past due payments. Filing for bankruptcy does not affect the amount that you owe. Family courts consider a parent’s financial obligation to his or her children to be a serious matter. The modification process is quite tedious and difficult to obtain.

Child support modifications:

  •         Paperwork- it is necessary to file a petition for a court hearing to request the modification.
  •         Supporting documents- The judge will scrutinize your reasons for requesting modified child support payments. You will need to prove there is significant change to your financial status since agreeing to the original child support decree.

 

 

The bottom line is that many people find themselves overwhelmed with debt. When it comes to the point that you just cannot get out from under it, it may be necessary to file for bankruptcy. There are many myths and stigmas associated with bankruptcy. However, many financial institutions find the choice to file bankruptcy to be the responsible choice and will not hold it against you. Regardless of filing for bankruptcy, you must continue to honor your court ordered agreement to support your children, as a family attorney Tampa FL trusts would explain.  In doing so, you can focus on import financial obligations such as child support.

 

Thanks to our friends and contributors from The McKinney Law Group for their insight into family law practice.

 

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