Chapter 7 is very limited in helping avoid a support lien. Chapter 13 is much more powerful to help avoid a support lien, as long as you precisely meet some conditions.
Child and Spousal Support Liens
If you fall behind on child or spousal support payments, your ex-spouse can put a lien on your home. (Most likely a lien can be imposed on your other
property, but we’re focusing here on your real estate). The procedures vary from state to state. The spouse will generally file the lien where the property’s deed is recorded. Most often, that’s at the local county recorder’s office.
The lien gives legal notice about the support claim against you and is filed against the title to your house. It provides your ex-spouse power to make you pay when you sell or refinance your home. Sometimes the lien can force the sale of the house to pay the support debt. So you want to avoid a support lien whenever possible. Or at least stop its enforcement after it’s been recorded.
Does Bankruptcy Stop the Filing of a Support Lien?
“[A]ny “act to create any lien” is generally stopped by a bankruptcy filing. See Section 362(a)(4) and (5) of the U.S. Bankruptcy Code about the “automatic stay.” The filing of a support lien is an “act to create… [a] lien.” So it appears that bankruptcy might stop a support lien.
However, there’s an exception under that automatic stay statute for the collection of support. See Section 362(b)2)(B) of the Bankruptcy Code. If you file a Chapter 7 “straight bankruptcy” case, your ex-spouse can continue collecting unpaid and ongoing support against you. This collection includes recording a support lien on your house and enforcing that lien as described above. So a Chapter 7 case filing will not stop the filing of a support lien against you and your home. And it won’t prevent the enforcement of that lien.
But there’s an exception to this exception. Under the right conditions, filing a Chapter 13 “adjustment of debts” case will stop a support lien. Unlike Chapter 7, Chapter 13 can prevent support liens from being filed and recorded. Chapter 13 can also stop a previously recorded lien from being enforced.
That’s because although Chapter 13 does not stop the collection of ongoing support, it does stop the collection of past-due support. By its nature, a support lien pertains to past-due support. So filing Chapter 13 can prevent the filing and recording of a support lien.
The Conditions under Chapter 13
Above we said that Chapter 13 protects you and your home from a support lien under the right conditions. These conditions are arguably sensible. But you must meet them precisely, or you’d very likely lose the unique benefits of Chapter 13. Your ex-spouse could begin collecting for past-due support, including filing and enforcing a support lien.
The conditions you must meet include:
- Staying current on your ongoing support payments
- Arranging to catch up on your past-due support within your 3-to-5-year Chapter 13 payment plan
- Staying current on your monthly Chapter 13 play payments (through which you’re catching up on your past-due support)
If you don’t keep these conditions, you lose the protection from the collection.
If you’re behind on support payments, filing a Chapter 7 case will not stop your ex-spouse (or support enforcement agency) from recording a support lien against your house. Nor will Chapter 7 halt the enforcement of that support lien. But, if you’re not already behind, filing a Chapter 7 case may discharge (write-off) enough other debts so you can stay current on your support obligations.
Chapter 13 will stop the recording and enforcement of a support lien for past-due support. But you must pay off the entire past-due support obligation during your Chapter 13 payment plan. And you must do so precisely as agreed in that plan. Lastly, you must also keep current on any ongoing support obligation. If you do all these requirements, Chapter 13 will protect you and your home from any support lien. Then at the end of your case, you will be current on all support. Therefore your ex-spouse/support enforcement agency will no longer have any ability to impose a support lien. Contact your local Kalispell Bankruptcy Attorney for more information about this issue.