Are you facing the heavy burden of debts while trying to meet your child support obligations? Beliefs about bankruptcy in this situation vary widely. Some believe it can’t help, and some believe it is a 100% blank slate moving forward. However, the reality is somewhere in the middle. While bankruptcy can reorganize your finances and help you tackle debts, it doesn’t absolve you of child support responsibilities.

Today, we want to clear up the confusion about what bankruptcy can do for you if child support payments and debts are piling up.

Does Bankruptcy Allow For Discharging Child Support?

Child support debts are uniquely shielded from the impacts of bankruptcy. Regardless of how you file or why, dependents must continue to receive necessary financial support. Bankruptcy can help financially to the point where payments become manageable, but you cannot discharge child support payments themselves.

Unlike most other debts, child support obligations are prioritized, meaning they are among the first to be paid out of any available assets. Legislators purposefully craft laws in these ways to protect Florida kids and promote their well-being over the discharge of financial obligations. In fact, both federal and state laws reinforce this stance.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy results in the debtor undergoing asset liquidation, where non-exempt assets are sold off to pay creditors. Since child support is treated with the utmost priority and proceeds exist from the liquidation, these payments are among the first to get funds applied. If there aren’t enough funds, the debtor remains responsible for past-due child support payments and must also continue paying during this time and into the future.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows debtors the chance to reorganize debts and manage them through a repayment plan spanning three to five years. Child support payments aren’t extraordinarily unique or complicated, so Chapter 13 has provisions for handling child support arrears. Chapter 13 repayment plans must outline how debtors will fully account for all overdue child support payments within the allotted timeframe. Additionally, failure to continue ongoing payments means the debtor is failing to comply with the terms of the Chapter 13 plan.

FAQ: Potential Issues and Complexities of Child Support Obligations

  • How does filing for bankruptcy in Florida affect my ability to pay child support payments? Debtors are expected to comply with all existing child support orders throughout the bankruptcy process. Even without the ability to discharge, bankruptcy filers immediately gain some financial relief from debt discharges, and they can use this opportunity to plan for upcoming payments. If child support payments are the only reason someone is going into debt, bankruptcy may not help in some cases. However, in the vast majority of cases, the discharge of other unrelated debts will provide the buffer needed to get back on track.
  • What happens to child support obligations in cases where the debtor’s financial situation improves during a Chapter 13 bankruptcy plan? If a debtor’s financial situation improves significantly during their Chapter 13 bankruptcy, adjustments to the repayment plan, including child support payments, may be proposed. Since child support is determined by the debtor’s current income and ability to pay, any substantial increase in financial resources can lead to a reassessment of the payment amounts. However, this must also be balanced against the repayment of debts to avoid overburdening the debtor with impossibly high payments. If your situation ever changes enough to warrant potential updates to child support, a bankruptcy attorney can assist in making sure your bankruptcy and child support obligations do not overlap.

Richard V. Ellis is an experienced family law and bankruptcy attorney in Sarasota, FL. Call today to learn how our team can help you overcome debt issues related to child support, alimony, or any other financial setback.