Filing bankruptcy mostly does not affect the collection of child or spousal support against you—except it can help in one very important way.
Support Obligations Mostly Not Affected by Bankruptcy
1. No Discharge (“Write-Off”) of Child and Spousal Support Obligations
Your support obligation was determined by state law and a divorce court’s order. Bankruptcy law does not attempt to disturb that obligation. Support is excluded from bankruptcy’s legal write-off of most debts.
2. Collection of Ongoing Monthly Support Obligations Not Stopped
Your bankruptcy filing has no effect on your ongoing support amount(s). Again, that amount was determined by a divorce judge and can only be changed by such a judge. The monthly collection of that court-ordered amount can continue regardless of your bankruptcy filing. This is true whether you file a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment of debts.”
3. Collection Past-Due Support Obligations Also Not Stopped Under Chapter 7
Any and all of the following can continue after you file a Chapter 7 case:
the voluntary withholding of support from your paycheck or account
the garnishment of your paycheck and/or bank account
the interception of your income tax refund
the reporting to a credit reporting agency that you’re late on support payments
potentially the suspension of your driver’s license and even occupational licenses
This is in contrast to how past-due support obligations are affected under Chapter 13—see below.
4. Various Divorce/family Court Proceeding Are Not Stopped by Bankruptcy
Your bankruptcy filing stops most lawsuits and other court proceedings against you. But it does not stop divorce/family court proceedings to:
establish a support obligation
increase or decrease the support amount
address child custody or visitation issues
deal with domestic violence
establish the paternity of a child
dissolve a marriage, other than as it pertains to the division of property
Chapter 13 CAN Stop Collection of Past-Due Support
The most important way that bankruptcy can help is only available under Chapter 13. This help is for any support payments that you had not made on time and continue to owe.
Filing a Chapter 13 case stops all the potentially very aggressive ways that your ex-spouse and/or the support enforcement agency can collect any such past-due support. They have to accept catch-up payments determined by your actual ability to pay.
You have to pay the entire past-due amount by the time you finish your 3-to-5-year Chapter 13 case. And you must immediately start or continue to make any ongoing support payments strictly on time. Then when you successfully complete your Chapter 13 case you will be completely current on the support.
Bankruptcy Can Also Help Less Directly.
Both Chapter 7 and 13 can help by simply getting rid of or significantly lower your other debt obligations. Then usually you’ll be able to more reasonably pay your child and/or spousal support and avoid falling behind.
Consider Trying to Lower Your Ongoing Support Amount
As you file bankruptcy seriously consider going back to the divorce court to change the monthly support amount. If you’re filing bankruptcy now that may be a good indication that your finances have deteriorated since the domestic relations court determined the amount. Compare your income and expenses now to what they were when the support amount was determined. You may be able to lower your support obligation to a more reasonable amount.