Bankruptcy & Child Support

Bankruptcy is a legal process that allows individuals or businesses to declare that they are unable to pay their debts. It is often seen as a last resort for those who have exhausted all other options for managing their debts. When an individual or business files for bankruptcy, the court may order the sale of their assets to pay off their debts, or it may discharge some of the debts entirely.

Child support is a payment made by one parent to the other parent to help cover the costs of raising a child. In Texas, child support is typically ordered by a court or other government agency when parents are separated or divorced. It may also be ordered when a parent has primary custody of a child and the other parent is not involved in the child’s life. Learn more about the firm.

There are several types of bankruptcy that may be available to individuals or businesses, including Chapter 7 bankruptcy, Chapter 11 bankruptcy, and Chapter 13 bankruptcy. Chapter 7 bankruptcy is the most common type of bankruptcy for individuals, and it allows for the discharge of most unsecured debts, such as credit card debt and medical bills. Chapter 11 bankruptcy is typically used by businesses, and it allows the business to reorganize its debts and continue operating. Chapter 13 bankruptcy is also available to individuals and allows them to repay their debts over a period of time, which usually covers three to five years.

Child support payments are not typically dischargeable in bankruptcy, which means that they cannot be eliminated through the bankruptcy process. This is because child support payments are considered a priority debt, meaning that they must be paid before other debts. In fact, bankruptcy laws specifically state that child support payments must be paid in full, regardless of whether the parent filing for bankruptcy is able to pay their other debts.

However, bankruptcy may still have an impact on child support payments in some cases. For example, if an individual files for Chapter 13 bankruptcy, they may be able to negotiate a lower child support payment as part of their repayment plan. Additionally, if an individual files for Chapter 7 bankruptcy and their assets are sold to pay off their debts, the proceeds of the sale may be used to pay child support arrears (past-due child support payments).

It is important to note that bankruptcy should not be used as a way to avoid paying child support. Parents who fail to pay child support may face serious consequences, including wage garnishment, driver’s license suspension, and even jail time. If you are unable to pay child support due to financial hardship, it is important to speak with an attorney or a government agency to explore options for modifying your child support payments.

In summary, bankruptcy is a legal process that allows individuals or businesses to declare that they are unable to pay their debts. While bankruptcy may have an impact on child support payments in some cases, child support payments are generally not dischargeable in bankruptcy and must be paid in full. If you are unable to pay child support due to financial hardship, it is important to seek help and explore options for modifying your payments rather than relying on bankruptcy to avoid your obligations. See more here.