Imagine this scenario. Your ex has been ordered to pay you child support after your New York divorce, and she does—approximately half the time. As the months pass, many payments are missed and the amount of back child support due to you increases. Then you find out that she has just filed for bankruptcy to deal with a huge debt load. Does this mean that you will never see your money?
Child support, spousal maintenance, and other support obligations are nondischargeable, meaning that they cannot be eliminated in a New York bankruptcy. Whether your ex files for Chapter 7 or 13, her obligation to pay child support remains in place, meaning that she must continue to make payments to you as they come due. Support debts are also priority, meaning that they receive special treatment in her bankruptcy case.
Child support in Chapter 7
When someone files for Chapter 7 bankruptcy and they have nonexempt assets, the trustee sells this property and distributes the funds to creditors in order of priority. Child support is at the top of the list of priority debts, which means that if there are any proceeds to distribute, you will be paid first.
If your former spouse does not have any nonexempt assets, you will not receive any money from the bankruptcy, but her discharge will not eliminate the child support arrears. Any post-filing income is not considered part of the bankruptcy estate, so collection actions like garnishing wages and intercepting tax refunds may be carried out during a Chapter 7 without violating the automatic stay order.
Child support in Chapter 13
Chapter 13 bankruptcy requires a debtor to repay all of their priority obligations, such as child support, through a court-approved repayment plan. What this means is that a designated percentage of your former spouse’s plan payments will be used to repay the child support arrears.
Depending on how much she owes, the monthly amount you receive could be quite high, because Chapter 13 plans cannot exceed five years. Before she can receive a Chapter 13 discharge, all arrears must be paid off, and she is required to be current in her ongoing support payment schedule.
While bankruptcy is intended to deliver a fresh financial start, it does not allow parents to escape their moral and legal obligation to support their children finacially. That is why such debts are nondischargeable and survive all bankruptcy chapters.
If you have questions or concerns about a former spouse’s bankruptcy impacting their past and future child support obligations, a New York family law attorney can advise you on how to proceed, so your children receive the funds they need and are entitled to.
If you or your ex-spouse have filed for bankruptcy and you are owed child support, then you should seek the legal advice of a qualified attorney. Jayson Lutzky is a Bronx, NY lawyer who has been practicing law for more than 34 years who offers free in-office initial consultations. Call 718-329-9500 to learn more or visit www.MyNewYorkCityLawyer.com today.