If you owe child support, a bankruptcy will not change your obligation to pay the child support, and it will not discharge any delinquent amounts owed. That does not mean, however, that your other debts cannot be discharged.
What is Priority Debt?
Child support, or any other domestic support, is considered a “priority” debt in bankruptcy, which means it receives special privileges over other unsecured debts (like credit card and medical debts). Certain types of tax debts are also considered “priority” debts.
Can Priority Debts be Discharged in Chapter 7?
In a Chapter 7 bankruptcy, priority debts are not discharged, meaning you will still owe these debts after your bankruptcy. If you have unprotected assets that are liquidated through the bankruptcy (not typical for most consumer Chapter 7 cases), priority debts are also paid first from the proceeds.
Can Priority Debts be Discharged in Chapter 13?
Priority debts are also not discharged in Chapter 13 bankruptcy. However, you must repay all priority debts through your Chapter 13 plan. This can be an extremely useful tool to help you catch up on and prioritize delinquent support payments, for example, through a Chapter 13 repayment plan.
By the time you pay off the domestic support debt through the bankruptcy, your repayment period may be nearing its end—meaning you will have paid off a debt that you were required to pay (and would be non-dischargeable in Chapter 7), while, potentially, paying minimal amounts to other, “non-priority” creditors.
Chapter 13 also has the unique ability to discharge other debts related to a divorce that are not “in the nature of support” for a child or ex-spouse. Debts resulting from a property settlement in your divorce may be dischargeable in Chapter 13 bankruptcy, but they are not in Chapter 7. Distinguishing between these types of debts can sometimes be subject to interpretation, which can complicate the issue. You should consult with an experienced bankruptcy attorney if you owe debts relating to a divorce.
Get Professional Help for Debt Relief
You owe it to yourself to talk to an attorney about child support and bankruptcy obligations. The team at John T. Turco & Associates, P.C. has years of experience and understands the issues around bankruptcy and divorce. We specialize in bankruptcy cases in Nebraska and Iowa will help you navigate debt relief through the bankruptcy process.