Bankruptcy provides limited but at the same time extraordinary help with support obligations.
1. Support obligations are highly unusual debts, which in many respects are NOT affected by your bankruptcy case.
a. No present or past discharge of child and spousal support obligations. The previous months’ and the current month’s support obligations were established by a domestic relations court’s order, and bankruptcy law does not attempt to disturb those obligations.
b. No stopping of the collection of ongoing monthly support obligations through either Chapter 7 or Chapter 13. Same thing here—this obligation was established by a domestic relations judge and can only be changed through such a judge, with the monthly collection of that court-ordered amount being allowed to continue in the meantime.
c. No stopping of collection for past-due support obligations under Chapter 7. This includes the voluntary withholding from your paycheck or account, the involuntary garnishment of your paycheck, the interception of your income tax refund, the reporting to a credit reporting agency that you’re late on support payments, and potentially the suspension of a drivers’ license and even occupational licenses (for nurse, physician, electrician, etc.). More on how past-due support obligations are treated under Chapter 13 below.
d. No stopping of a domestic relations court proceeding to establish a support obligation, or to increase or decrease the support amount. Again, the bankruptcy judge does not tread on the toes of the domestic relations judge on support issues.
2. But one way that bankruptcy can help, specifically with back support, can be extremely important.
Chapter 13 CAN stop collection efforts for BACK support—support payments that you had not made on time and continue to owe. When you file a Chapter 13 “adjustment of debts,” that stops all of the super-aggressive ways that your ex-spouse and/or the support enforcement agency can get money out of you to pay the support arrearage. They are forced to accept catch-up payments at amounts based on your actual ability to pay. You ARE required to cure the entire past-due amount by the time you finish your 3 to 5 year Chapter 13 case. And you MUST immediately start or continue to make any ONGOING support payments on time. But as long as you do these and fulfill all the other requirements under Chapter 13, you will not have to worry about this ever again. At the completion of your case you will be completely current on support, and this major headache will be forever gone.
3. Bankruptcy can also help in more mundane ways.
Even if you aren’t behind on your support payments, or aren’t being chased for a few payments you missed, both Chapter 7 and 13 can simply help get rid of or significantly lower your other debt obligations so that you can more reasonably and more reliably pay your child and/or spousal support. That will make it less likely that you will ever fall behind.
And if you are now paying too much in support now, as you file bankruptcy you might seriously consider going back to the domestic relations court to change the monthly support amount for future payments. If you’ve been forced to file bankruptcy, that’s likely good indication that your finances have deteriorated since the domestic relations court determined the amount. When you file bankruptcy you are required to calculate and list your income and expenses, so you can compare those to what they were when the support amount was determined. Bankruptcy can help with your past support situation in only the limited way discussed above, but it can also arm and inspire you to lower your support obligation to a more reasonable amount.