If you are paying child support and considering filing for bankruptcy, it is important to know how a bankruptcy ruling will affect your child support responsibilities.  On the other hand, if you are receiving child support and the paying parent has filed for bankruptcy, you may be curious how the bankruptcy proceeding will affect your child support payments.

Child support payments generally cannot be discharged in bankruptcy.  The parent who owes child support cannot escape this duty by filing for bankruptcy.  Likewise, bankruptcy proceedings do not act as a stay or hold on an action to modify child support payments. Similarly, child support “in arrears” (unpaid child support that has accrued) is not dischargeable in bankruptcy.

Bankruptcy is designed for people caught in financial circumstances beyond their control, such as job loss or illness.  Those with excessive debt have an opportunity to begin with a fresh start by reducing or eliminating their debt.  Certain debts are dischargeable in bankruptcy proceedings while others are not.

Exceptions to Dischargeable Debts in Bankruptcy

Title 11 of the United States Code enumerates various exceptions to dischargeable debts in bankruptcy.  Domestic support obligations are not dischargeable.  Likewise, debts owed to a spouse, former spouse or a child incurred by debtor in the course of divorce or separation, are not dischargeable.

During bankruptcy the issue arises of how to classify debts.  Generally, if the debt is part of a property settlement out of a divorce, then it is dischargeable.  However, if the debt is for alimony or child support then it is not dischargeable.  The Bankruptcy Court looks beyond the labels of debts in agreements and court orders to determine the intent of the parties or the court.  The Bankruptcy Court looks at the nature of the debt.  In terms of child support, if the Court determines that the debt is in the nature of support owed to a child and it was the intent of the court or parties to have the debt be support, then the debt is nondischargeable.

Debts “In the Nature of Support”

The “in nature of support” restriction is a complex concept that limits the right to discharge debts as they relate to ones children.  Chapter 13 and Chapter 7 Bankruptcy debts “in the nature of support” for a child cannot be discharged.  These debts are basically any debts incurred that relate to the child’s welfare and upbringing, other than unpaid child support.  An example of this includes medical bills for care that your child received.  This debt cannot be discharged in bankruptcy.

Change in Circumstances

If the paying parent’s financial situation has changed since the child support order was first issued, that parent may file a motion to modify the order if he/she is having trouble making payments.  The provisions of a child support order may be modified only if there is a substantial and continuing change of circumstances.

While filing for bankruptcy does not discharge an obligation to make child support payments, it does substantially change one’s financial position and may qualify for reduction by a motion to modify a child support order.

Experience Matters

The relationship between child support and bankruptcy is complicated.  For assistance in determining whether you are eligible to file for bankruptcy, or for information regarding how bankruptcy will affect child support payments you should consider contacting an experienced bankruptcy attorney.

As an experienced bankruptcy and family law attorney, Christopher Arrington can help you navigate both bankruptcy and your child support obligations.  Call our office today and find out how we can assist you