If you are the parent of a minor child who was ordered to pay child support, you are legally obligated to make those child support payments as ordered by the court. Sometimes, however, a parent gets behind on child support for any of a variety of reasons. If you have suffered a significant enough economic downturn, you may consider filing for bankruptcy protection. A Murfreesboro child support lawyer at Bennett, Michael & Hornsby explains why bankruptcy will not get rid of your child support arrearage.
Once upon a time, people were imprisoned for failing to pay their debts. Fortunately, we no longer do that in the United States. When a debtor faces financial hardships that make paying off debt unrealistic, U.S. bankruptcy laws allow the debtor to seek protection from creditors. Bankruptcy is not intended to be a regular solution to overwhelming debt. Instead, bankruptcy is supposed to be used sparingly and only when other avenues are not viable solutions.
Individuals typically file Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is often referred to as a “liquidation” while a Chapter 13 bankruptcy is referred to as a “reorganization.” If you file a Chapter 7 bankruptcy, all non-exempt assets are sold to pay creditors and remaining debts are discharged, meaning you do not need to repay them. Under a Chapter 13 bankruptcy, you create a plan to repay most debts within a specific time (usually three years). If you abide by the plan, debts remaining at the end of the plan are discharged.
Can Child Support Be Discharged in Bankruptcy?
Bankruptcy law is an unusual mix of state and federal law. U.S. federal law established the right to seek protection from creditors through the U.S. Bankruptcy Courts; however, state laws establish what assets are exempt when filing bankruptcy. Federal law also dictates what debts cannot be discharged. Although most debts are potentially dischargeable, child support is one debt that cannot be discharged in bankruptcy.
How Is Child Support Treated in a Bankruptcy?
When you file for bankruptcy protection a Trustee is assigned to your case. The Trustee has several important duties and responsibility, including taking control of non-exempt assets. Every debtor must attend a “341 meeting of creditors” presided over by the bankruptcy Trustee. At (or before) that meeting you must disclose all assets and debts, including any child support arrearage you owe. The Trustee is then required to inform the holder of the domestic support order (in this case the parent to whom the back child support is owed) of bankruptcy payment rights and the availability of child support collection services. In addition, when a bankruptcy is discharged both the domestic support holder and the state enforcement agency are notified of the discharge.
Child support is also considered a “priority debt” which means that if money is available to pay creditors, child support obligations are legally required to be paid first. If you have non-exempt assets in a Chapter 7 bankruptcy, it also means that those assets will be sold by the Trustee and the money used to pay your child support arrearage. If an arrearage remains after all non-exempt assets have been utilized, that debt cannot be discharged, meaning it will remain an enforceable debt after your bankruptcy is over. If you file a Chapter 13 bankruptcy, your back child support must be paid in full during your repayment plan period and you must continue to make your child support payments while the bankruptcy is ongoing. Before you can discharge your bankruptcy at the end of your repayment period you must certify to the court that you are current on all child support obligations.
Contact a Murfreesboro Child Support Lawyer
If you have additional questions about child support in Tennessee, it is important that you consult with an experienced Murfreesboro child support lawyer to make sure your rights are protected. Contact the team at Bennett, Michael & Hornsby as soon as possible by calling 615-898-1560 to schedule your appointment.