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Bankruptcy's Benefits and Limits for Stopping Child and Spousal Support Collections

The rules are clear. Chapter 7 does not help much with support obligations (other than freeing up more of your money to pay it). But Chapter 13 can help tremendously.

Regular, Monthly Support Payments

How much you must pay each month in child and/or spousal support is determined by state family court. Bankruptcy court is a part of the federal courts, while family and divorce law consists of state law administered by state courts. The bankruptcy courts are obligated to respect the decisions of state court about the amount of your ongoing support obligations.

So, your bankruptcy judge will not intervene in the amount of your ongoing support, and bankruptcy law does not stand in the way of the collection of that ongoing support. Thus, neither of the two main kinds of consumer bankruptcy-Chapter 7 or 13-affect your obligation to pay your ongoing support obligations. To do anything to change the amount, or to establish that you should not be paying it at all, those are issues you need to take up with the state family court.

Back Support

If you fall behind on paying support, your ex-spouse and the state support enforcement agencies have extraordinary power to make you pay. Besides garnishing wages and seizing financial accounts, they can grab your tax refunds and put a lien on your real estate. Even worse, they can suspend your regular AND commercial driver's licenses so that you can't drive to your job or do your job. And they can even suspend your professional and occupational licenses.

But bankruptcy does have a way to fight back regarding back support in a way that is not available with your regular monthly payments. Although a "straight" Chapter 7 bankruptcy does not have any effect on these aggressive collection methods, a Chapter 13 payment plan will stop virtually all such collections.  

But to do so successfully, you definitely have to do it right. You have to start making the regular support payments as soon as you file and do so thereafter consistently. In your Chapter 13 plan you have to show that you will pay all back support in full during the 3 to 5 year plan. And then you must comply with the terms of your plan throughout the length of the case.

Exceptions to the "Automatic Stay" for Family Court

Most litigation against you comes to a screeching halt the moment you file your bankruptcy case. But certain kinds of court actions can continue, or start, in spite of your bankruptcy. Either your ex-spouse, a person in a similar role, or the state-or even you-can use the courts:

·         to determine or modify support obligations;

·         to establish or deny paternity, along with any related support issues;

·         to dissolve a marriage (other than issues of division of property or debts);

·         to address domestic violence;

·         to report overdue support to credit reporting agencies; and

·         to enforce medical obligations to a child and/or ex-spouse.

The Bottom Line

Bankruptcy court has limited jurisdiction on support issues, especially with ongoing support. As for back support, only Chapter 13 can stop their collection. If done right, this can be a very powerful weapon to counter the potentially debilitating collections tactics available to your ex-spouse and to the state support enforcement agencies.

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