People struggle with different types of debts. It could be mortgages, car loans, medical debt, credit card debt, or child support. If you are struggling with child support and the arrears are quickly accumulating, you might be wondering whether filing Chapter 13 bankruptcy can help. Can it?
Should I File Chapter 13 Bankruptcy to Help with Child Support Arrears?
While child support payments may seem less serious than secured debts, accumulated arrears could attract severe punishment. The punishment for child support areas varies by state. In some states, you might lose your tax refunds and face wage garnishment; in others, you might be confined in jail.
If you have researched whether bankruptcy can help with child support arrears, then you know Chapter 7 bankruptcy cannot help. While you can get your other unsecured debts discharged in bankruptcy, domestic support debts like child support/alimony payments are non-dischargeable.
So, can Chapter 13 bankruptcy help with child support arrears?
Yes.
You can catch up with your outstanding child support arrears by including them in your repayment plan. When you make your monthly payment to your Chapter 13 trustee, they will use a portion of the payment to repay your outstanding child support. Upon completion of your repayment plan, your child support payment will be up to date. Thus, you will not be at risk of any punishment for child support arrears. So, if you are behind on your payments, filing for chapter 13 bankruptcy can help.
Can I Afford Chapter 13 Plan Payment?
Now that you are sure filing Chapter 13 bankruptcy can help if you are behind in your domestic support payments, the next consideration should be whether you can afford Chapter 13 monthly payments. Input your details in this calculator. The calculator uses bankruptcy forms to give an accurate estimate of how much your monthly payment will be. It will also give a breakdown of the advantages and disadvantages of Chapter 13 and how it compares to other debt-relief options.
Requirements on Child Support Payments Under Chapter 13
There is one requirement you need to meet. You must remain up to date on future child support obligations. Missing any future payments risks your case getting dismissed. If your case gets dismissed, you will be in the same position as you were before filing for bankruptcy and might face the same penalties you did. On completion of your repayment plan, before the court closes your case and discharges your debt, you will be asked to sign an affidavit stating your domestic support payments are current.
Other Debts that Chapter 13 Can Help With
Besides helping with domestic support payments, Chapter 13 can help with mortgages and car loans by stopping foreclosures or repossessions. Therefore, you get to keep your house, car, or other assets. The automatic stay on your account will keep creditors at bay and stop them from taking extreme measures, including wage garnishment or filing lawsuits against you.
Chapter 13 bankruptcy can also help lower the balance on your car, or get rid of your second mortgage, provided you meet some requirements. You can also get rid of non-dischargeable debts like credit card debts and personal income taxes for less than you owe. Unlike Chapter 7, which focuses on liquidation, under Chapter 13, you get to retain your assets.
Take Away
You can stop struggling with child support arrears or back alimony payments by filing for Chapter 13 bankruptcy. While filing for bankruptcy may offer numerous other advantages, it remains a big decision. You need to evaluate your financial situation and consult an attorney to determine if it is your best debt relief option. We can help you find a Chapter 13 bankruptcy attorney near you if you don't have one. Get in touch with us, and let us discuss your options.