Can Bankruptcy Help If My Child Support Is Getting Out Of Control?
If you are considering filing bankruptcy in Phoenix or Tucson, Arizona and you have child support payments, you may wonder how declaring bankruptcy may impact your child support payments. Our Arizona Zero Down Bankruptcy Attorneys discuss both sides of child support in a Chapter 7 and Chapter 13 bankruptcy. Regardless if you are the one receiving or paying the child support, the possibility of filing for bankruptcy is an important decision.
Child Support In Arizona & Bankruptcy
Like most states, the limits for child support in Arizona can be quite high. If you have any other dependents, the court can order that you pay child support that is up to 50% of your income. If you don’t have other dependents, that limit increases to 60% of your income. The court can even tack on an additional 5% if you are more than 12 weeks behind on your child support payments. Even if you don’t pay state maximum child support, it’s easy to see how someone could quickly accrue a large balance of child support in arrears. And until that parent obtains a child support modification, the child support arrearages will only continue to pile up. So, if you have a back child support balance that is getting out of control, you may be wondering, can bankruptcy help me? Therefore, if you have any additional questions after reading the following, call our firm for your free case evaluation at (602) 609-7000.
Child Support Is An Unsecured Debt: Does That Mean It Can Be Discharged By a Bankruptcy Filing?
In short, no. Although child support is technically an unsecured debt, it will not be discharged like the rest of your unsecured debts such as credit cards and medical bills. It is considered more of a priority debt, making it one of the limited unsecured debts that aren’t discharged by bankruptcy, like student loans and certain taxes. So if the majority of your debt is child support, a Chapter 7 bankruptcy won’t do anything to affect your child support balance. The only way it may be able to help is by clearing other debts so that you have more available income to pay your child support.
The other most common type of consumer bankruptcy is Chapter 13 bankruptcy. Instead of simply wiping away your debts like a Chapter 7, Chapter 13 bankruptcy reforms your debts into a payment plan based on how much spare income you have available after monthly necessities. Child support is one of the expenses that will be deducted from your average monthly income to determine how much disposable monthly income you have available.
Do I Keep Making My Child Support Payments During a Bankruptcy?
Filing bankruptcy won’t discharge your child support debts, and won’t temporarily relieve you from your duty to financially support your child. You must continue making your child support payments during a Chapter 7 bankruptcy. Your past-due child support payments will be part of your Chapter 13 payment plan, and you must continue making current payments as well. Failure to make your current payments during your bankruptcy will only cause your balance in arrears to grow. But if your child has reached adulthood, and you only have arrearages to pay off, you should have resolved your child support obligations by the time your case is discharged. Contacting a Phoenix Bankruptcy Attorney would be helpful.
Child Support Wage Garnishments & The Automatic Stay
One of the top reasons people file bankruptcy is because their wages are being garnished. When you file bankruptcy, a protection known as the Automatic Stay goes into effect. It keeps your creditors from foreclosing your home, levying your bank accounts, repossessing your car, and sometimes most importantly, garnishing your wages. The debtor will be protected until their case is discharged or dismissed, unless their creditors successfully petition the court to proceed with collection with a Motion for Relief from the Automatic Stay. However, child support wage garnishments are an exception to the automatic stay. Filing a Chapter 7 bankruptcy does not stop a child support wage garnishment in Arizona. Filing Chapter 13 bankruptcy will only stop your child support wage garnishment if your payment plan will pay off your full balance in arrears. Depending on how your household income compares to Arizona’s median income, this will be either three or five years.
Child Support Payments Going Forward In a Bankruptcy
Filing bankruptcy does not modify the amount of child support you are obligated to pay each month. Only the family law court out of which your child support was ordered can change the amount you owe each month. In Arizona, your existing support orders must have been in place for at least 12 months before you can seek a modification. Your family law judge will only grant a modification if there has been a substantial and continuing change in circumstances. You need to consult a family law attorney in the state in which your child support orders originated for more information on this subject. Otherwise, your child support payments will remain the same during and after your bankruptcy.
My Ex Owes Me Child Support & Just Filed Bankruptcy: What Should I Do?
If your ex files Chapter 7 bankruptcy, you should see no impact, unless it improves your ex’s ability to make their monthly payments on time. Their filing will not discharge their payments in arrears or going forward, and it won’t stop their wages from being garnished for child support. If your ex has a significant balance in arrears, you might actually finally start to see some consistent payment if they file Chapter 13 bankruptcy. You won’t need to petition the court to be included as a creditor or take any additional steps beyond what you have already done through the family law court system to receive your payments.
Don’t Let Back Child Support & Other Special Concerns Set Your Bankruptcy Up For Failure
Filing bankruptcy without an attorney’s representation can have disastrous results. Debts could be excluded from your bankruptcy discharge. Your assets could be taken away from you by your trustee, who will then sell them and use the profits to pay off your debts. Your case could be dismissed, and you could be disqualified from filing again for a certain number of years or become ineligible for protection from the automatic stay. In extreme situations, you could even be charged with bankruptcy fraud. This is a serious felony that carries prison time and heavy fines. A bankruptcy attorney can help you navigate the system so that you get the most out of it without getting the worst.
If you have significant child support arrearages, chances are that a Chapter 13 bankruptcy will be more effective in addressing your issues than a Chapter 7 bankruptcy. While some Chapter 7 debtors may be able to get away with filing pro se, or representing themselves, this just isn’t the case with Chapter 13 bankruptcy. More than 99% of self-represented Chapter 13 cases end in dismissal, rather than discharge. If you are serious about getting your financial situation under control with a Chapter 13 bankruptcy, the fact of the matter is that you need to retain an experienced bankruptcy attorney.
Consult Arizona Zero Down Bankruptcy Attorneys
No matter the chapter of bankruptcy you need to file, our Arizona bankruptcy team has experience, including when it comes to specialty issues like back child support. Therefore, we use our expertise to achieve ideal bankruptcy outcomes for our clients at low rates with payment plan options. Additionally, some of our clients even qualify to file for ZERO DOLLARS DOWN. Get guidance towards your next step and receive an affordable quote for legal services with your free case evaluation. Our experienced Arizona bankruptcy lawyers are standing by- use our online form or call (602) 609-7000 to get started in the road to a “Fresh Start”.
Some of the most common reasons that people file for bankruptcy protection include: Wage Garnishment, Foreclosure, Medical Bills, Credit Card Bills, Tax Debt, and Vehicle Repossession. Our Arizona $0 Down bankruptcy team of Phoenix Bankruptcy Lawyers can help you become debt free.
Our experienced debt relief attorneys offer bankruptcy and debt relief to people across Arizona including but not limited to people in: Maricopa County, Pima County, Pinal County, Phoenix, Tucson, Mesa, Chandler, Gilbert, San Tan Valley, Scottsdale, Avondale, Peoria, Buckeye, Goodyear, Ahwatukee, Casa Grande, Maricopa, Florence, Flagstaff, Yuma, and Sun City, Arizona.