Last time, we discussed the issue of child support and a Chapter 7 bankruptcy, and we noted that while you cannot discharge a child support obligation in a Chapter 7, it might affect how you could collect that obligation if your former spouse filed Chapter 7.
This time, we will look at a Chapter 13, and how it affects the relationship of child support. As with Chapter 7, one thing it cannot do is end, modify or eliminated the child support obligation. Child support remains a priority claim that is paid ahead of other debts. But because the centerpiece of a Chapter 13 is the repayment plan, that you must maintain for the three to five year life of the bankruptcy, those child support payments take on a different light.
Most people enter bankruptcy because they have more bills than they have income. The advantage of a Chapter 13 is that it allows you repay important debts, like your home mortgage or child support, while protected by the bankruptcy court and eliminate some or all of your unsecured debt, such as credit cards.
If you are struggling to pay child support, a mortgage and expenses like medical or credit card debt, a Chapter 13 can be beneficial. Your plan payments are based on your disposable income, which is what is left of your income after necessary life expenses are subtracted.
If you have child support payments and a mortgage, that alone may take most of your disposable income, leaving little, it may reduce or eliminate all of your unsecured debt, as there will be little remaining cash to allocate within your plan.
A Chapter 13 can also help with repaying arrearages for child support. However, because you must be current on all child support payments, including your arrearages, when your plan is completed, in order to receive your discharge, it is important that you work with your bankruptcy attorney to put together a Chapter 13 plan that will achieve this goal.