Bankruptcy laws provide people experiencing financial hardship with a viable path out of unmanageable debt. But not all kinds of debt can be discharged in bankruptcy, and past-due child support is one such balance that will remain after filing. Whether you owe or are owed child support, it's essential to understand the basics of how bankruptcy will affect these payments.

A Priority Debt

Chapter 7 bankruptcy eliminates many unsecured debts. When an individual files for Chapter 7, their debts are ranked in order of priority. The debts at the top of this list are considered too critical to be discharged, which places the responsibility for repayment on the individual.

Child support is one of the highest priority debts a person can have, and under existing bankruptcy laws, it must be paid prior to other critical debts like past-due taxes. So, when an individual filer owing child support seeks bankruptcy assistance, their payment obligations will remain, even after their other, lower-priority debts have been discharged by the courts.

Child Support & Chapter 13

Chapter 13 bankruptcy restructures debts into a long-term repayment plan. As such, debts are not eliminated by the bankruptcy courts. A filer can put their past-due child support payments in their Chapter 13 repayment plan, but the amounts must be paid back in full and within five years.

An Automatic Stay

When a person files for any type of bankruptcy, an automatic stay is issued. The stay prevents creditors from pursuing payment from the filer, but it does not exempt the filer from their child support commitments. Even with an automatic stay in place, bankruptcy laws allow for legal proceedings to initiate or amend child support, the collection of that support, or the garnishment of wages.

A skilled bankruptcy law attorney will ensure you understand your rights and responsibilities when it comes to child support and filing for bankruptcy relief. The lawyers at Bender & Bender have nearly 40 years of experience serving the Wood County, WI, region. They offer comprehensive legal representation in Chapter 7 and Chapter 13 bankruptcy claims. Call (715) 423-4400 or visit them online to schedule a consultation.