Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 11 Bankruptcy?”
In addition to all the other trouble it can cause, divorce can be a costly endeavor. Large numbers of North Carolinians find themselves behind on child support debt, sometimes so much so that they may be contemplating bankruptcy as a way out. To find out more about whether this is doable, keep reading.
Unfortunately for those who have fallen behind on their support payments, child support debt is not dischargeable in bankruptcy. This applies to both Chapter 7 and Chapter 13 bankruptcies. The reason is that Congress passed laws categorizing some debts as priority debts, a designation which means that they are too important to be wiped out in a bankruptcy filing.
What does this mean?
The fact that child support debts are not dischargeable means quite simply that there is no way around paying them. Even if you file for bankruptcy protection and the judge approves your discharge you will still be left to pay all your child support arrearages.
Child support debt receives priority
Besides being non-dischargeable, child support debts are also given special treatment under bankruptcy law. This means that in a Chapter 7 filing child support debt is grouped with other priority debts and is paid off first, before money goes to other, lower priority debts. Even among priority debts child support is given a place of prominence, receiving money before others.
In Chapter 13 bankruptcies you are able to restructure your child support debt in a payment plan but it must all be paid back in the end. Because Chapter 13 bankruptcies only last up to five years, this means that if you have high child support arrearages you may be looking at very high monthly payments.
So is it hopeless?
Absolutely not. Even if you feel you owe far more child support than you can afford to pay back there are still options. Though bankruptcy may not eliminate your child support obligations, by eliminating other financial obligations you can free up money that can now go towards paying down your arrearages. Even though you can not discharge child support debts themselves, you can use bankruptcy to make important changes to your financial picture that allows you to tackle the debt more effectively.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.
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