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When you can’t pay your bills, your wages are being garnished, and you’re receiving frequent phone calls and letters from debt collectors, filing for bankruptcy is often the right solution to achieving financial freedom. But if one of your debts is back child support, will that also be discharged if you file Chapter 7 or Chapter 13 bankruptcy? We’re digging into the answers to help you create a path forward to a future without debt.
Whether you file for Chapter 7 bankruptcy or Chapter 13, some debts will be discharged and others are not eligible. More specifically, when you finalize the bankruptcy, it erases the following:
However, the following debts are not forgiven or discharged during bankruptcy:
Child support debt or back child support does not get discharged during Chapter 7 nor Chapter 13 bankruptcy. Also, unlike other debts, there isn’t an automatic cease of collection efforts for child support – you may still have to attend court and your wages may still be garnished to pay back what you owe.
It’s important to note that while child support is not discharged, filing for Chapter 7 or Chapter 13 bankruptcy can still help you pay back what you owe.
If you have a household income of less than half the median income in your state, you may be eligible to file Chapter 7 which liquidates your debt. Your non-exempt valuables, like stocks, a second car, or valuables will be sold by a trustee to pay off debt and once that money has been used, eligible debts are discharged.
Child support is considered a higher priority debt than medical bills and credit cards, so anything sold during the liquidation of debt will go first toward child support. This can help you reduce past due payments significantly though you must continue making present payments.
Chapter 13 bankruptcy restructures your debt. All your debt, including medical bills, back child support, and credit cards are negotiated into a monthly payment you make to a trustee for up to five years. The trustee disperses the money to those you owe, again, paying higher priority debts first. At the end of the time period, eligible debts are discharged.
This gives you time to pay back child support without getting deeper into debt. However, you must still continue to make your current payment.
In addition to using Chapter 7 or Chapter 13 to pay down your child support debt, filing for bankruptcy also frees up your income. Instead of paying several hundred dollars a month in credit card bills, medical bills, and other payments, much of that can be discharged so you can focus on providing proper care and support to your children.
If you are seeking a bankruptcy attorney in Florida to help you achieve financial freedom, Stiberman Law can help. Since 1998, our law firm has worked with people from all walks of life to consolidate debt, file for bankruptcy, and take control of their financial future. To learn more about your options, reach out to us today at (954) 922-2283 or fill out the form below to learn more.
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