How Does Bankruptcy Impact Child Support Alimony Payments?

Bankruptcy Impact Child Support Alimony Payments

Bankruptcy is a legal process designed to provide relief to individuals overwhelmed by

Debt. Moreover, it offers them a fresh financial start while also ensuring fair treatment of creditors.

However, for individuals obligated to make child support and alimony payments, filing for bankruptcy can have significant implications on their ability to meet these financial

obligations and on the rights of recipients. However, understanding how bankruptcy impacts child support and alimony payments is essential. It is essential for both the paying parties and recipients to navigate this complex terrain effectively.

The Priority Of Child Support And Alimony Obligations

Child support and alimony obligations are considered priority debts in bankruptcy proceedings, meaning they are not typically dischargeable through bankruptcy.

The legal principle underlying this prioritization is for the well-being and support of dependents, particularly children. Their upbringing relies on these payments for their financial security and welfare.

Chapter Seven Bankruptcy And Child Support/Alimony

Chapter Seven Bankruptcy And Child Support/Alimony

Chapter Seven bankruptcy is another name for liquidation bankruptcy. It involves the sale of non-exempt assets to pay off creditors, with any remaining qualifying debts discharged.

Child support and alimony payments are not dischargeable debts in Chapter Seven Bankruptcy. Consequently, the bankruptcy trustee may liquidate the debtor’s non-exempt assets to satisfy other outstanding debts.

They include, such as credit card debt or medical bills. However, child support and alimony payments take precedence over other debts in the distribution of Assets.

Chapter Thirteen: Bankruptcy And Child Support/Alimony

Chapter 13 bankruptcy, or reorganization bankruptcy, takes into account the creation of a court-approved repayment plan. It allows the debtor to pay off debts over a period of three to five years.

However, child support and alimony arrears (past-due payments) are given special treatment in Chapter 13 bankruptcy. Moreover,  they must be paid in full through the repayment plan.

However, failure to include these obligations in the repayment plan or failure to make payments as required can result in the dismissal of the bankruptcy case or conversion to Chapter 7 bankruptcy.

Automatic Stay And Enforcement Of Support Payments

The automatic stay provision is one significant impact of bankruptcy on child support and alimony payments. It goes into effect immediately upon filing for bankruptcy.

The automatic stay prohibits creditors, including recipients of child support and alimony, from taking collection actions against the debtor.

Examples include payments such as wage garnishment or asset seizure. However, the automatic stay does not apply to ongoing child support and alimony obligations, which must continue to be paid during the bankruptcy process.

Modification Of Support Obligations

While bankruptcy does not discharge child support and alimony debts, it may allow debtors to seek modification of support obligations under certain circumstances.

Suppose the debtor experiences a significant change in financial circumstances, such as job loss or medical hardship.

In that case, they may petition the court to modify support payments based on their ability to pay.

However, any modifications must be approved by the court and are subject to the best interests of the child standard.

Read Also: What Are My Rights If Accused Of Domestic Violence In A Custody Case?

Impact On Recipients Of Support Payments

For recipients of child support and alimony payments, the debtor's bankruptcy filing can create uncertainty and financial strain.

While bankruptcy does not discharge support obligations, recipients may experience delays or interruptions in payments during the bankruptcy process, particularly if the debtor’s financial situation is unstable.

Moreover, recipients should stay informed about the bankruptcy proceedings, communicate with the bankruptcy trustee and their legal counsel, and assert their rights to receive timely support payments.

What Are The Benefits Of Hiring A Family Law Attorney?

Benefits Of Hiring A Family Law Attorney

Alimony payment and custody of a child are two highly sensitive issues, and they affect one’s life. Especially if you have declared bankruptcy, both the subjects increase their sensitivity.

So, when an individual turns bankrupt, the individual, the individual jostles the hardships of fate. However, being broken completely from within, an individual loses all its strength to combat the inner battles of life.

Hence, it becomes highly difficult for an individual to come out of one’s entanglement and live a life under a proper structure. Therefore, in such a case, most people choose to make the individual pariah.

Here, the role and benefits of hiring a family law attorney become quite crucial. Getting the help of these professionals can help you with issues like alimony and child support.

Eliminate A Toxic Relationship 

It’s easy to get wrapped up in toxic relationships. Moreover, a toxic relationship torments you from within and may make you utterly puzzled. You may feel overwhelmed, especially when you see that you are incapacitated to manage issues like child support and alimony.

However, one thing is certain: if both parties do not support each other, then it becomes the nurturing ground for ongoing conflict, disrespect, and even physical support. The divorce rate in the USA is 39%, and the most common causes include:

  • Substance abuse.
  • Emotional and physical abuse.
  • Sexual problems, including lack of compatibility with sex.
  • Affairs and infidelity,
  • Emotional and physical abuse.
  • Money problem.

A bonafide lawyer can help you eliminate the toxicity of life.

Failure To Comply With The Court Order

Family law attorneys have a thorough understanding of the trials and tribulations. Ultimately, this results in increasing hatred and negativity, which can lead to further aggravation of the situation. The issues further become complex with child support, divorce, and alimony.

Failure to comply with the laws and regulations can result in more fines for the parties involved in the lawsuit.

Hence, under such circumstances, one needs the help of family law attorneys. They are experienced enough to tackle issues related to family law.

Benefits Of Hiring A Child Support Lawyer

When the relationship between both individuals reaches the periphery of divorce, the concerned stakeholders. The saddest part of these family feuds is the child support.

This is why one must take note in hiring alimony and child support lawyers. However, here are some of the reasons why one must hire a child support lawyer.

The 2018 federal poverty level of $1,012 monthly determines if the person is capacitated or incapacitated in asking for child custody authority.

However, if there is no deviation and the income of the obligator falls below it, that time, the court sets a guideline for a minimum support order of $ 50 per month.

Furthermore, the laws differ from those of the parents with a combined income higher than $30000 or higher months. At that time, the child’s support cannot be determined using the schedule.

At that time, the lawyer’s role became key in this situation. Moreover, hiring a lawyer becomes a must, especially for situations like enforcement procedures. Even if the other party hires a lawyer, you have to hire one.

Bankruptcy Has Implications For Child Support Payments

Bankruptcy can have significant implications for child support and alimony payments, both for paying parties and recipients.

While bankruptcy does not discharge support obligations, it may affect the timing and manner of payment and provide opportunities for modification of support obligations.

Understanding the legal rights and obligations associated with bankruptcy and support payments is essential for debtors and recipients to navigate this complex intersection of family law and bankruptcy law effectively.

By staying informed, seeking legal advice from a Denver family law lawyer when necessary, and complying with court orders, parties involved in bankruptcy and support obligations can work towards fair and equitable resolutions that prioritize the children’s best interests and ensure financial stability for all parties involved.

Mony Shah