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The answer is yes, but it’s more complicated than that. While filing for Chapter 13 bankruptcy in Raleigh won’t wipe out your child support obligations, it will help you get caught up with payments. As a result, you can continue taking care of your child while you get back on your feet financially.
Child Support is Priority Debt
Congress deems child support debt is too important to eliminate in bankruptcy. Because of this, it won’t be discharged under Chapter 13 bankruptcy in Raleigh. In fact, you need to pay off all missed payments, aka outstanding child support arrears, through your repayment plan.
Catch Up on Child Support through Chapter 13
A key advantage of Chapter 13 bankruptcy is that it gives you time and breathing room to help you manage your debts using a convenient repayment plan. As we mentioned, any child support arrears you have pre-bankruptcy must be paid off in your repayment plan.
In many cases, catching up on child support can help reduce the amount you would have to pay to unsecured creditors through your plan (such as credit card companies).
Since most parents filing for bankruptcy would rather support their children than pay credit card debt, you get to hit two birds with one stone— getting current on child support payments while wiping out more of your unsecured debts.
You May Get More Protection from the Automatic Stay
The automatic stay is a powerful tool that stops creditors from contacting your or collecting on your debt after you file for bankruptcy.
However, it does not prohibit efforts to collect child support payments from property that’s not included in your bankruptcy estate. Under Chapter 13, however, your earnings become property of the bankruptcy estate. Therefore, creditors need to file a motion for relief from the automatic stay (and get the court to approve it), before they can take any action to pull child support from your earnings post-bankruptcy.
Some people don’t know this benefit of filing for bankruptcy. Having a bankruptcy lawyer in Raleigh, NC on your side will help you take advantage of such tools provided by bankruptcy law.
You Must Be Current on Child Support to Receive a Chapter 13 Discharge
Before the courts grant you a Chapter 13 discharge, you’re required to certify that you’re current on your child support obligations. Because of this, you have to pay off any child support payments you miss during your case. Otherwise, you won’t be able to get a discharge.
Protect Your Loved Ones Through Bankruptcy
The interaction between bankruptcy law and family law are complex. As your bankruptcy attorney in Raleigh, NC, we’ll make sure you get through the process with the least amount of stress on you and your child. Call Weik Law Office today at 919-845-7877 for a free consultation, and set up a time to speak with one of our friendly professionals.