Those who get behind on or struggle to pay their child support might be tempted to try and file bankruptcy on the payments that they have defaulted on. While you can technically file on whatever you choose, all debt is not necessarily going to be allowed or approved. In some cases, filing on it may actually make your situation even worse than it already is. Child support is one of a few topics that don’t normally end well for the debtor in bankruptcy court.
Secured and Unsecured Debt
There are two different kinds of debts that get discharged or reorganized by bankruptcy courts: secured and unsecured.
Secured debts are debts that were developed in lieu of some type of security that can be repossessed in the event you default. For example, a secured credit card offers you a limited line of credit, but it also requires that you open an account, usually with the amount of the account being the same as the amount of credit you have access to. In some cases, that credit costs more than the line of credit itself because it includes fees and interest rates. The premise is that if you default on the payment, the credit card company can keep what is in your account. It’s their way of guaranteeing that they will get their money back. The purpose of this type of account is to allow you to have the ability to make purchases using a debit or credit card rather than having to use cash.
Unsecured debt is debt that relies completely on your promise to repay it. Child support debt would likely be considered unsecured because you don’t have an account or an item that the creditor would take in lieu of payments.
Priority Debts and Child Support Obligations
There is a special class of debts in bankruptcy court that involves debts that are unsecured but not dischargeable. Normally these debts are the results of court orders, such as child support. Child support is considered a priority debt. In other words, this isn’t a loan that you applied for but is instead a financial obligation that the court assigned to you as a result of the actions taken that lead to your status as a parent. In short, it isn’t considered so much a debt, but rather an obligation. There are other debts that might fall into this class as well. For example, if you robbed a store and were ordered to pay restitution, that restitution isn’t likely to get discharged by the bankruptcy courts. For alternatives to bankruptcy, click here. You can also read more about priority debts and how to best manage them in your bankruptcy on our blog.
The Role of Child Support Debt in Bankruptcy
Even though you cannot successfully claim your child support as one of the debts that you would like to have forgiven, that doesn’t mean that your obligation to pay the support isn’t taken into account. In fact, the court will need to be made aware of every element of your financial status in order to determine whether you qualify for a successful discharge or reorganization of your debt. Our bankruptcy lawyers can navigate this process and ensure that your case is filed successfully. You may have a better chance of catching up your child support and making future payments in a timely manner after you have filed bankruptcy. Whether you file a Chapter 7 or a Chapter 13, you have a chance to start with a clean slate, which can help even with child support.