Child Support and Spousal Support
If you are behind in your support payments, you owe a very special kind of debt. It may surprise you to hear that even this debt can be tamed through bankruptcy.
California Law Enables Your Ex-Spouse to be Extremely Aggressive
Your ex-spouse, or a support enforcement agency helping him or her, has very powerful means to get you to pay your child and spousal support obligation. Besides garnishing your wages and bank accounts, Section 17520 of the California Family Code authorizes the DMV to suspend your driver's license once you are a month behind on support payments. This statute also applies to a commercial driver's license.
In fact under subsection (a)(2) of that same California statute, your "license, certificate, credential, permit, registration, or any other authorization to engage in a business, occupation, or profession" issued by any "state commission, department, committee, examiner, or agency" can be suspended or revoked. This applies to a wide range of professions and occupations, including physicians, dentists, dental hygienists, veterinarians, architects, building contractors, barbers, cosmetologists, physical and occupational therapists, attorneys, court reporters, and realtors, among many others .
Straight Bankruptcy-Chapter 7-Helps a Little
Chapter 7 can help by legally writing off ("discharging") all or most of your other debts so that you could then hopefully be able to afford to catch up and keep current on your support. California law gives you 150 days to resolve your support arrearage problems after giving you notice of a pending suspension of your driver's/occupational/professional license. Also, some local support enforcement agencies may be more flexible. For example, Orange County's Department of Child Support Services may allow the release of a license suspension if an obligor "signs an agreement to remain current with their child support, pays the current month's obligation, a nominal amount towards the delinquency and agrees to pay a fair amount monthly towards the arrearages." Once you discharge your other debts, you will better be able to concentrate on paying the support and complying with such an agreement.
But the filing of the Chapter 7 case itself does not itself legally stop the driver's or professional/occupational license suspension process. The bankruptcy code's " automatic stay " that freezes almost all collections against you or your property has an exception for child and spousal support. So you should not file a Chapter 7 case to solve a support arrearage problem unless you are not very far behind, are confident that you can get current in 150 days, or have very strong assurances that your local support enforcement agency will work with you in the way described in the paragraph above.
Chapter 13 Payment Plan CAN Help Much More
If instead you file a Chapter 13 case-the three-to-five-year "adjustment of debts" bankruptcy-doing so does legally stop collection of support obligations. The exception mentioned above to the "automatic stay" protection does not apply in most respects to Chapter 13, so you CAN stop the license suspensions and other collection procedures. That's because Chapter 13 protects your ongoing and future income.
That is, it protects your income as long as you are strictly meeting certain conditions to keep the "automatic stay" in effect:
- The terms of your Chapter 13 plan must demonstrate how you will catch up on all the back support during the life of the plan.
- Your budget must have room for the regular monthly divorce court-ordered support payments
- You must actually pay those regular monthly payments on time, starting with the first one that is legally due right after your Chapter 13 is filed, and then like clockwork every single month thereafter.
- You must also make your monthly plan payments on time, with the result that the back support is in fact be paid in full by the completion of your case.
- At the end of your Chapter 13 case you must certify that you are current on your ongoing support payments, or else you cannot complete your case and get a discharge of your other debts.
Chapter 13 can be a great option because it is more powerful than your ex-spouse and the support enforcement agency, at least in the limited but potentially crucial way just described. For many people it's an excellent tool because it allows you to favor your support debt over just about every other one, so it's often a good way to take care of that obligation. Under Chapter 13, often you can pay very little to non-support creditors other than the ones that also matter to you, like your mortgage, vehicle loan, taxes. It's definitely an option worth looking at if you have fallen behind on your support payments.