If you’re behind on support payments, filing under Chapter 13 can legally stop your ex-spouse and support enforcement from pursuing you.
Your filing of a Chapter 13 case can stop your ex-spouse and support enforcement agency from very aggressively pursuing you. It can give you a reasonable time to cure your unpaid support payments. But you have to strictly follow the rules to get this advantage.
Here’s how it works.
The “Automatic Stay” As It Applies to Child and Spousal Support
Filing either a Chapter 7 or Chapter 13 bankruptcy case stops most creditor collection actions. This happens through the power of the “automatic stay.” See Section 362(a) of the U.S. Bankruptcy Code.
But child and spousal support debts are an exception to the automatic stay. The Bankruptcy Code makes clear that the “automatic stay does not apply to “the collection of a domestic support obligation.” Section 362(b)(2)(B). “Domestic support obligation” includes both child and spousal support. Section 101(A14). And it includes support that becomes owing “before, on, or after the date” of filing the bankruptcy case.
So collection of both past-due support and ongoing support is generally not stopped by a Chapter 7 “straight bankruptcy” filing.
Also, if you file a Chapter 13 “adjustment of debts” case, the collection of ongoing monthly support payments is not stopped. That makes sense since there is usually a divorce court order that requires the payment of those monthly amounts. The federal bankruptcy court respects these divorce court orders. So if you need to terminate or reduce a monthly support payment, that needs to be done through the divorce court which entered that support order.
Chapter 13 and Past-Due Support Collection
However, Chapter 13 does stop the collection of past-due support.
That can be hugely important. That’s because a Chapter 13 case not only stops past-due support collection, but provides a practical way to catch up.
If you are behind on child or spousal support Chapter 13 gives you up to 5 years to catch up. And it can protect you throughout that time in a number of ways. It protects you directly from the collections actions of your ex-spouse or your local support enforcement agency. And it also protects you from all of your other creditors as you deal with all your debts at once through a court-approved payment plan.
Your Chapter 13 payment plan works because it is based on what you can afford to pay. It takes care of everybody in one package so that you don’t worry about not being able to catch up on support because of the demands of other creditors.
Preventing or Stopping Aggressive Support Collection
This power of Chapter 13 is so important because your ex-spouse/support enforcement agency have some extremely aggressive collection tools. If you get behind, your wages and bank accounts can be garnished, liens can be placed on your real estate, and your driver’s license can be suspended. In most states any other state-issued licenses can also be suspended. This includes occupational and professional licenses that you may need to pursue your livelihood.
So you are very much at the mercy of your ex-spouse/support enforcement agency if you’re behind on your support obligations.
Must Follow Rules Strictly
So Chapter 13 can get you out of this difficult dilemma by stopping this intense collection of past-due support. But you can only maintain this protection if you follow the rules very strictly.
- Your Chapter 13 plan must include enough money to pay off the past-due support before the end of the case.
- You must keep current on your ongoing support (assuming you continue to owe it). This includes being very clear about when the first monthly support payment is due after your Chapter 13 case is filed and paying it on time. Otherwise your ex-spouse/support enforcement can inform the bankruptcy court of your non-payment. It would then very likely get permission to start/resume collection of the back support. That also applies to all subsequent monthly support payments during your Chapter 13 case.
- You are already obligated to keep current on your monthly Chapter 13 plan payments, but all the more so here. Those plan payments are what’s paying the past-due support (along with whatever other debts you are paying through the plan). So if you fail to make any plan payment on time your ex-spouse/support enforcement can ask the court for permission to resume collection of the back support amount.
Chapter 13 gives you extraordinary power to stop collection of your past-due support. But you need to be really responsible or else you’ll lose that power.