Tennessee residents often file Chapter 7 or Chapter 13 petitions when overwhelming debts make their financial situations unmanageable, but some obligations cannot be included in personal bankruptcies. Priority debts that cannot be discharged in a bankruptcy include some unpaid taxes and domestic support obligations like unpaid alimony and child support. However, filing a bankruptcy could make meeting child support obligations easier by freeing up money that would otherwise have been used to make loan or credit card payments.
Child support in a Chapter 7 bankruptcy
When an individual files a Chapter 7 bankruptcy, one of the first questions the bankruptcy trustee asks them is whether they have domestic support obligations. Custodial parents who receive child support are notified when noncustodial parents submit Chapter 7 bankruptcy petitions, and the automatic stay that is issued by the court does not stop child support wage garnishments. Individuals who file Chapter 7 bankruptcies must continue to make their court-ordered child support payments, and seeking debt relief will not prevent them from facing penalties for nonpayment.
Child support in a Chapter 13 bankruptcy
Individuals who file Chapter 13 bankruptcies make monthly payments for three or five years to pay down their debts. Unpaid child support can be included in a Chapter 13 payment plan, but all arrears must be paid off when the final payment is made. Individuals who make Chapter 13 monthly payments must also continue to make their court-ordered child support payments. If they fail to make child support payments or fall behind on their payments, their Chapter 13 bankruptcy cases could be dismissed. Filing a Chapter 13 bankruptcy makes paying unpaid child support easier because it allows the money to be paid over time.
Modifying child support obligations
Filing a personal bankruptcy does not allow a noncustodial parent to avoid their child support obligations, but the amount they are required to pay could be modified if their circumstances change significantly. Filing for bankruptcy is not considered in itself a significant change in circumstances, but the unmanageable financial situation that prompted the bankruptcy may be sufficient grounds for a child support modification.