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Does Bankruptcy Stop Collections of Child and Spousal Support?

The answer, unfortunately, is it depends. But the good news is that the rules are quite clear. And there IS relief from what can otherwise be extremely aggressive collection action against you.

Ongoing Support

Divorce court determines how much you must pay each month in child and/or spousal support. The bankruptcy court is a part of the federal court system but it respects the expertise and authority of the state divorce court about the amount of your support obligations, which is determined by state law.

So bankruptcy court does not intervene in the amount of your ongoing support, or in the collection of that ongoing support. Think of it like a new debt incurred each month, such as a utility. In the same way, once you file a bankruptcy case—either Chapter 7 or 13—that does not affect your obligation to pay the following months’ of utility payments, or your subsequent support obligations. To change the amount, or to establish that you don’t have to pay it at all, you would have to go back to divorce court.

Support Arrearage

If you fall behind on support payments, your ex-spouse and the support enforcement agencies—whether based on Oregon or other states—have extraordinary collection powers against you. Not only can they garnish wages and your financial accounts, grab your tax refunds and put a lien on your real estate, they can also suspend your standard AND commercial driver’s licenses, and your professional and occupational licenses. They can take away your livelihood.

The bankruptcy rule for dealing with this is simple. 1) A “straight” Chapter 7 bankruptcy will have no effect on the collection of back support payments. 2) A “payment plan” Chapter 13 one will stop virtually all such collection action, as long as you address it appropriately. That means that you immediately resume making the ongoing support payments, show in your Chapter 13 plan that you will pay all back support in full during the 3 to 5 year plan, and then comply with the terms of your plan throughout the case.

Limited Support-Related Action Always Allowed

Your ex-spouse or similar person, or the state on his/her behalf, can always use the courts for the following, which you can as well to your own potential benefit:

  • to establish or change support obligations and their amount;

  • to establish or deny paternity, and any related support issues;

  • to dissolve a marriage (except for issues of division of property or debts);

  • to resolve issues of domestic violence;

  • to report overdue support to credit reporting agencies; and

  • to enforce medical obligations to a child and/or ex-spouse.

Conclusion

Bankruptcy has virtually no effect on ongoing support obligations, other than writing off your other debts so that you can afford to pay your support. To change or get out of future support obligations, you have to go to the state court which determined your support amount. As for back support payments, only Chapter 13 can stop their collection. If done right, this can be a tremendously powerful weapon to defeat the otherwise quite scary collections actions of your ex-spouse or the state.

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