Can bankruptcy discharge child support debt?

On Behalf of | Oct 16, 2019 | Bankruptcy |

The state of North Carolina dictates how much child support a parent owes based on their income level. For those under crushing debt, bankruptcy may seem like the answers to their struggles. Unfortunately, child support is not a debt a person can have discharged under Chapter 7.

NOLO states that Chapter 7 automatically “stops most creditors from coming after you to collect their debts.” The exception is child support. Any property not included in the bankruptcy can be subject to a lawsuit to collect owed child support. In fact, anything earned after the bankruptcy can be taken by child support creditors.

Bankruptcy does not discharge priority debts such as child support. Since child support is a priority debt, those creditors receive priority in the asset distribution. Child support receives payments before even tax obligations. Unsecured debts such as credit cards are last, receiving payments only after paying priority debts.

The offers a positive side to filing bankruptcy despite still owing child support. The debtor may be able to use bankruptcy to help manage the obligations they currently have for child support. By better managing payments, the debtor can avoid further trouble for the law due to owing child support.

Under the debt restructuring of Chapter 13 bankruptcy, the court pays priority debts first often starting with child support payments. Credit card and medical bills often receive the lowest priorities and may never actually receive payment. With a debt restructuring, the debtor may be able to take up to five years to repay their owed child support payments. This may offer debtors some respite.