Thanks to a number of factors, child support payments can be difficult to make—and when you start missing payments, the child support debt in Montgomery County, TX can pile up rapidly. Many people ask their attorneys whether they can get rid of their unpaid child support debt if they file for bankruptcy.
The short answer: no. The state places an even higher priority on child support than on taxes, so no matter which type of bankruptcy you file for, you’ll still be paying child support, including any arrears. If your income status has changed since the original child support order, it’s advisable to have an attorney petition to get that support order modified to reflect it.
Here’s an overview of why you can’t discharge your child support debt in bankruptcy in Montgomery County, TX.
Chapter 7 bankruptcy
In this type of bankruptcy, all of your non-exempt assets are collected when you file, and are sold off to repay creditors—but that doesn’t include your unpaid support, current and future child support. Furthermore, the assets collected at the time of filing are part of the estate—any money you earn or assets you acquire after filing are fair game for your child support creditors to seize. Similarly, if your wages are garnished to pay child support, that will not be discharged after Chapter 7 bankruptcy.
Chapter 7 bankruptcy has an automatic stay, which prevents creditors from coming after you once you’ve filed. However, this does not apply to child support.
Chapter 13 bankruptcy
In Chapter 13 bankruptcy, your debts are collected and you are required to pay them back (plus the value of your non-exempt assets) over a set period of time, based on the amount of disposable income you have each month. You will be required to pay off your child support arrears in this time, too. Many people appreciate the chance to rectify their old accounts as well as the fact that their wages will not be garnished to pay the mounting debt.
You are still required to make child support payments in Montgomery County, TX throughout your bankruptcy proceedings, and it’s crucial that you do not miss a single payment. When the court goes to discharge your debt, they will look to make sure that you’ve been keeping current on your child support obligations. Each payment will need to be made before the judge will sign off on your Chapter 13 repayment plan, and they will not look favorably on someone who has been consistently late or missed any payments at all.
In most cases, if significant child support debt is a factor, Chapter 13 bankruptcy will almost always be a better bet. Your wisest course of action is to call a reputable bankruptcy attorney and ask them which type of bankruptcy would be right for you. They’ll help evaluate your assets, discuss the means test with you and help you make the right choices for your situation.
Need a bankruptcy lawyer? James R. Jones, Attorney at Law can help with your bankruptcy proceedings, including cases with child support debt—call us today.