Does Bankruptcy Cover Child Support in Texas?
Child support is considered a non-discharged priority debt, meaning that when filing Chapter 7 bankruptcy child support debt cannot be forgiven. However, it does receive special benefits under Chapter 13 bankruptcy allowing you to catch up on your debt in a more efficient manner.
Debt can be a real stressor. In many cases, people get into debt for reasons out of their control, such as a job loss, a workplace accident, a disability, a car crash, an illness like cancer, or they find themselves having to be 24-hour caregivers for a loved one who falls ill or is in an accident. When debt becomes too much to bear, it makes sense why people would want to file Chapter 7 or 13 bankruptcy.
Child support debt is one of those debts like credit card debt and medical debt that a lot of people have. It’s not unusual for a noncustodial parent who is struggling financially to owe thousands in child support arrears in addition to all of their other debt.
So, it’s understandable why so many debtors ask their bankruptcy attorneys, “Can child support arrears be included in bankruptcy?” In short, child support CANNOT be discharged in Chapter 7 or Chapter 13 bankruptcy, which we explain below.
Why Child Support Can’t Be Discharged During Texas Bankruptcy?
Why can’t child support be included in bankruptcy? Because Congress decided that it was just too important to be discharged in bankruptcy. Child support obligations are called “priority debts” in bankruptcy and therefore, they cannot be discharged, nor can they be reduced in any way. They do, however, receive special treatment.
If you have a variety of debts and you file Chapter 13, your child support arrears will be given preferential treatment, which can actually be a good thing for you. You see, if you have credit card debt for example and child support debt, your child support arrears will be more important.
Meaning, the amount you’re required to pay on your non-priority debts, such as credit cards may actually be reduced so you can catch up on your child support arrears. In effect, you could end up paying less on your non-priority debts.
If you are behind on child support and you file a Chapter 13, you will have to get caught up through your repayment plan, which lasts 3 to 5 years. Because repayment plans can’t exceed 5 years, a large child support debt can make the monthly payments high.
Child Support & Chapter 7 Bankruptcy
If you have any non-exempt assets that are liquidated in Chapter 7 and you have some money to pay off some debts, the child support will be at the top of the list since it’s a priority debt. In fact, child support is so important that it’s paid before other priority debts.
We hope this article helped answer your questions. If you need help with a child support matter or if you need to ask the court for a downward modification, we invite you to contact The Law Office of Gregory C. Goline, PLLC today.