November 17, 2019

How are Child Support Arrears Treated in Chapter 13 Bankruptcy?

Chapter 13 bankruptcy and child support arrearagesChild support obligations – both on-going and arrears – cannot be discharged in bankruptcy.   However, even non-dischargeable debts like recent tax obligations, secured installments notes and (sometimes) student loans are regularly included in Chapter 13 repayment plans.

How are child support arrearage balances treated in Chapter 13?  Can the child support payer force a child support recipient to accept a 5 year payout of an arrearage balance?

The answer is “it depends.”  And often, the child support recipient (i.e. the custodial parent) gets to make the decision.

First, you should understand that Section 362(b)(2)(B) specifically excludes from the automatic stay any action to collect a “domestic support obligation.”  I read this to mean that if the child support payer files Chapter 13 bankruptcy, the automatic stay protection associated with a Chapter 13 filing should not stop a state court judge from hearing or ruling on a contempt action for collection of child support, nor should it stop a wage or bank account garnishment against the child support payer.

I would point out, however, that some state court judges will not assume anything about bankruptcy and will insist on an order from the Bankruptcy Judge before they will proceed with a child support collection case. [Read more…]