There has been a steady rise in bankruptcy filings in recent years. Some of these cases involving divorcing or divorced parents. Unfortunately, widespread confusion and misconceptions about how bankruptcy affects child support obligations can complicate these scenarios.
As such, it is a good idea to equip oneself with appropriate legal knowledge to avoid being caught off-guard by the law.
Myth: Bankruptcy wipes out all debts, including child support
This is perhaps the biggest misconception. In reality, child support obligations are considered “priority debts” under federal bankruptcy law. This means they cannot be discharged or eliminated through bankruptcy. Essentially, divorced parents remain fully responsible for paying both current and past-due child support, regardless of their bankruptcy status.
Myth: Bankruptcy stops all collection efforts, including those for child support
While it’s true that filing for bankruptcy results in an “automatic stay” that ceases most collection activities, child support is a notable exception. The Virginia Division of Child Support Enforcement (DCSE) can continue to collect current child support payments and even pursue collection of past-due support during bankruptcy proceedings. This can be carried out through methods like:
- Wage garnishment
- Property liens placement
- Interception of tax refunds
A child’s well-being comes first in any scenario concerning child custody.
Myth: Chapter 13 bankruptcy allows a divorced parent to pay less child support
Some people believe that filing for Chapter 13 bankruptcy allows a parent to reduce their child support payments. In reality, while Chapter 13 does allow for the reorganization of debts, it does not modify child support obligations. These payments must be included in the repayment plan at their full amount. The bankruptcy court cannot alter child support orders; only a family court can do that.
Myth: Bankruptcy filing during divorce doesn’t affect a child’s other parent
Contrary to popular belief, when a divorcing parent files for bankruptcy, it can indirectly impact their co-parent. While it doesn’t change the support obligation, it might affect the timing of payments, especially if there are arrears. The other parent may need to file a claim in the bankruptcy case to help ensure they receive payment for any back child support owed.
Navigating the intersection of bankruptcy and child support can be complex and confusing. It’s, therefore, wise for divorcing parents to educate themselves about their legal rights and alternatives in these cases. Seeking appropriate legal guidance is generally a wise way to get started.