Under federal law, child support is a priority debt in bankruptcy proceedings and cannot be discharged in either Chapter 7 or Chapter 13 bankruptcy. Protection for child support obligations comes from federal bankruptcy law. Specifically, 11 U.S.C. § 523(a)(5) of the U.S. Bankruptcy Code makes domestic support obligations like child support non-dischargeable in bankruptcy.
In Arizona, you cannot discharge past-due child support amounts through bankruptcy. Although bankruptcy cannot eliminate child support debt, Chapter 13 bankruptcy may provide some relief by allowing you to include past-due child support in your repayment plan. A bankruptcy attorney in Phoenix can also give you options to handle your past-due payments.
Child support is a court-ordered payment that you have to make to support your child financially. In Arizona, child support obligations are calculated based on the Arizona Child Support Guidelines.
These guidelines consider factors such as:
The Arizona courts use these factors to determine a fair and appropriate amount of child support. As such, child support is a priority debt under both Arizona and federal law. For this reason, it’s often excluded from bankruptcy proceedings. Therefore, the obligation will remain intact after you discharge all other debts.
In somea Chapter 7 bankruptcy cases, unexemptyour assets are sold to pay off creditors. If this occursHowever, child support debts receive special treatment:
Although Chapter 7 bankruptcy cannot eliminate your child support debt, it may provide indirect relief by discharging other debts. For example, if you have significant credit card debt or medical bills, eliminating them through bankruptcy could free up more of your income to pay child support.
In Arizona, certain assets are exempt from liquidation in Chapter 7 bankruptcy. Exemptions can help you retain essential property while still addressing your debts. However, if you have non-exempt assets, they may be used to pay child support arrears.
Chapter 13 bankruptcy involves creating a repayment plan to pay off debts over three to five years. In a Chapter 13 bankruptcy, child support is treated as follows:
While Chapter 13 bankruptcy doesn’t discharge child support debt, it can provide a structured way to catch up on arrears while protecting you from collection actions on other debts. This can be particularly helpful if you’ve fallen behind on child support payments due to temporary financial difficulties.
In Arizona, Chapter 13 bankruptcy may offer some advantages when dealing with child support debt:
When you file for bankruptcy, an automatic stay goes into effect. This stay prohibits most creditors from continuing collection efforts. However, there are exceptions for certain actions related to child support:
Although bankruptcy provides some breathing room from other creditors, how bankruptcy affects child support differs. Remember this when considering bankruptcy as a solution to your financial problems.
If you’re juggling child support debt and bankruptcy in Arizona at the same time, you may feel overwhelmed. Here are some ways to manage the debt:
Navigating bankruptcy and child support at the same time can be overwhelming. It leaves you vulnerable to making mistakes that can hurt you financially and legally. A Phoenix bankruptcy attorney provides guidance and legal support to help you find a solution that gets you back on your feet.
An attorney offers valuable support in several ways. They can explain your rights and responsibilities. An attorney can also help you explore available options beyond bankruptcy and manage all paperwork and communication. They can also represent you in court and assist you in creating a long-term plan to manage your financial challenges while fulfilling your parental duties.
Don’t let child support hurl you into financial hardship. Contact our bankruptcy law firm for a free consultation, and let us help you keep your wages. Fill out our online form or call Stone Rose Law to speak with a Phoenix bankruptcy attorney.
