Does Chapter 13 Bankruptcy Wipe Out Child Support Debt?

If an individual is behind on child support payments, filing for Chapter 13 bankruptcy will not eliminate the financial responsibility. Individuals will still be required by law to make ongoing payments, however, filing for Chapter 13 payments may make it easier for an individual to get caught up if they’re behind on payments.  

Here’s everything to know about how child support is treated when filing for Chapter 13 bankruptcy.

Chapter 13 Bankruptcy Does Not Dismiss Child Support Debt

Filing for Chapter 13 bankruptcy does not “wipe out” or dismiss child support debt, as this type of obligation is nondischargeable. Child support is a priority claim that takes precedence over unsecured debts and even tax arrears. What Chapter 13 can do is allow all debt arrears like child support to be paid over a 3-5 year period. 

Since these payment schedules are based on disposable income, an individual’s payments are unique and are designed to be affordable for each given case. The responsibility of payments are still expected to be paid as it comes due each month. 

Catching Up on Missed Child Support Payments with Chapter 13 Bankruptcy

One potential benefit of Chapter 13 Bankruptcy is that it allows debts to be organized, and be repaid with a payment plan that fits an individual. This means that any missed payments are included in the repayment plan in a way that’s affordable.

For some, these repayment plans can mean lesser child support payments due to Chapter 13 Bankruptcy reducing amounts that would have been paid to creditors.

What If You Lose Your Job?

The biggest challenge with Chapter 13 bankruptcy is that you are obligated to make the ordered payments for up to five years. What happens if you lose your job, become disabled, or are otherwise unable to maintain the payments for reasons beyond your control?

In this situation, you can engage a bankruptcy attorney to help you file a motion to modify your repayment plan. You will need to explain why the payments will be reduced and propose an amended plan to the court. 

Your creditors and trustee will have the opportunity to review the plan and object to it. If they approve it due to a significant change in your financial circumstances, your payments will be modified accordingly. If they object, you and your attorney can explain your situation to the court at the hearing. 

If you’re struggling with child support arrears but have a steady income, Chapter 13 bankruptcy can help you regain control of your finances and get back on track. At Maxwell Dunn PLC, we will work with you to create a repayment plan that you can afford and which will leave you with a clean financial slate at the end. To schedule a no-obligation consultation, contact us.