Can Child Support and Alimony Be Included In a Bankruptcy?
Posted on Nov 21, 2013 8:09am PST
The question often arises from many debtors as they begin to consider bankruptcy as a means of pulling themselves out of financial distress, "can I include child support or alimony in the bankruptcy?" The answer to this question depends on which obligation the debtor is attempting to include and whether he or she is considering filing a chapter 7 or
chapter 13 bankruptcy.
With most bankruptcy filings the automatic stay will temporarily suspend all garnishments and foreclosure efforts on the part of creditors while the bankruptcy is being prepared. However, the automatic stay triggered once a chapter 7 or chapter 13 bankruptcy plan is filed does not suspend the payment for child support or alimony. This is because these obligations are considered priority debts. Priority debts have been given priority over all other debt. As such, debtors are typically unable to discharge them completely in a bankruptcy. These debts are also considered priority in that they are paid before other non-priority debts such as medical bills and credit card payments.
In a chapter 7 bankruptcy filing the trustee will collect money and other non-exempt assets from the debtor and use them to satisfy any obligations payable to the priority creditors. Any non-exempt assets left over after all priority creditors are paid will be used to pay the unsecured creditors. With a chapter 13 bankruptcy, the priority creditors will have to be paid in full during the bankruptcy repayment plan period.
Douglas County Bankruptcy Lawyers have guided thousands of clients through the chapter 7 and chapter 13
bankruptcy process. We will explain this unique relationship between your priority and non-priority debt obligations and provide the best plan for resolving your financial issue.