Will Chapter 13 Bankruptcy Discharge My Child Support Debt?
As a parent it is your responsibility to provide for your children, which includes paying your child support on time. Arizona does not take this responsibility lightly and have many punishments at their disposal, including incarcerating parents who fail to pay their support orders. In addition, if parents have collected arrears on their child support, filing for chapter 7 or 13 bankruptcy will not discharge their debt. However, filing for chapter 13 might be able to help you get caught up on your payment.
In a chapter 13, child support obligations are just as important in bankruptcy court as they are in family court. They are considered priority debt and child support arrears must be paid through your chapter 13 payment plan. The significant difference between a chapter 7 and a 13 is that a chapter 13 stops collection activity for back support obligations, and a chapter 7 does not. Support collections may be stayed because the Bankruptcy Code considers the debtors earnings as property of the estate.
Fortunately, after these payments have been stopped, a Chapter 13 repayment plan allows a debtor to organize their debts, and by paying child support debt a debtor will reduce the amount he or she would otherwise pay to general creditors. Sometimes debtors can reduce how much they pay to other creditors by the amount of support debt they owe. This should be viewed as a positive because debtors would rather pay for their children’s well-being then have to pay random creditors. However, one key part is that the debtor must stay current by continuing to pay their support obligations or they will not receive their chapter 13 discharge.
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