What You Need To Know About Back Child Support And Bankruptcy

Dealing with financial troubles can be especially tough when you owe back child support. Many people in Phoenix, Arizona wonder, “Can you file bankruptcy on back child support?” Bankruptcy is a legal way to get rid of or reorganize your debts, giving you a fresh financial start. Back child support, however, is money that a parent is legally required to pay for the care of their child, and it’s taken very seriously by the courts.

Many Phoenix parents face challenges with unpaid child support, seeking financial solutions. Bankruptcy aids most debts, but handling child support is complex. Understanding federal, Arizona laws, and bankruptcy types is important to address past-due child support.

Short Summary

  • Filing for bankruptcy under Chapter 7 or Chapter 13 won’t eliminate your obligation to pay child support. 
  • If you choose Chapter 13, which involves a court-ordered repayment plan for your debts, your child support payments must be factored into the plan. 
  • Failure to pay past-due child support can lead to serious consequences like wage garnishment and property liens. It can also result in the suspension of your driver’s license.
  • While bankruptcy may help you manage other debts, it won’t prevent the collection of child support. 
  • In a Chapter 13 plan, child support takes precedence over payments to other creditors within the structured repayment plan. This allows you to allocate funds towards child support while potentially reducing payments on other debts.

The rules around bankruptcy and back child support in Phoenix, Arizona can be confusing. Even though bankruptcy offers a fresh financial start, your responsibility to pay child support comes first.

Can Bankruptcy Eliminate Back Child Support?

Bankruptcy can offer a fresh financial start for those burdened with unsecured debts. Back child support, or arrears, refers to child support payments that are overdue. This occurs when the non-custodial parent fails to make the required payments as specified in a court order or child support agreement. The unpaid amount accumulates over time,  leading to a legal debt.

However, child support is classified as a priority debt under bankruptcy laws, which means it cannot be eliminated through bankruptcy. Individuals who file for Chapter 13 bankruptcy require unpaid child support to be included in their repayment plan. On the other hand, Chapter 7 bankruptcy filers leave open to debt collectors and lawsuits seeking child support payment recovery.

Back child support can result in legal consequences, such as wage garnishment, tax refund interception, or even jail time, to ensure the financial well-being of the child involved.

What are the Consequences of Non-Payment of Child Support?

Failing to pay child support in Arizona can lead to several severe consequences. Not meeting these obligations can bring serious consequences from the state. Here are some of the main ones:

Wage Garnishment

  • Automatic Deduction: The court can order your employer to automatically deduct child support payments from your wages. This ensures consistent payment directly from your income.
  • Limits on Earnings: Up to 50% of your disposable earnings can be garnished if you are behind on child support.

Intercepting Tax Refunds

  • Federal and State Tax Refunds: The state can intercept both federal and state tax refunds to cover unpaid child support. This is known as the Federal Tax Refund Offset Program.

Suspension of Licenses

  • Driver’s License: Your driver’s license can be suspended if you fall significantly behind on payments.
  • Professional and Recreational Licenses: Professional, occupational, and recreational licenses can also be suspended, impacting your ability to work and engage in certain activities.

Liens on Property

  • Real and Personal Property: The state can place a lien on your property, such as your home or car, to secure the payment of child support arrears.
  • Impact on Selling or Refinancing: A lien can prevent you from selling or refinancing your property until the child support debt is paid.

Contempt of Court

  • Court Order Violation: Failing to comply with a court-ordered child support agreement can result in being held in contempt of court.
  • Possible Jail Time: Contempt of court can lead to fines and even jail time. Judges may impose incarceration to compel payment.

Denial of Passport

  • Federal Passport Denial: The federal government can deny issuance or renewal of your passport if you owe more than $2,500 in back child support. This restricts your ability to travel internationally.

Credit Score Impact

  • Negative Reporting: Non-payment of child support can be reported to credit bureaus, significantly impacting your credit score and future financial opportunities.
  • Long-Term Financial Effects: A lower credit score can affect your ability to obtain loans, credit cards, and even housing.

Seizure of Bank Accounts and Assets

  • Bank Levies: The state can levy your bank accounts, seizing funds to cover unpaid child support.
  • Asset Seizure: Other assets, such as stocks, bonds, or personal property, can be seized to satisfy arrears.

Legal Fees and Additional Costs

  • Court and Attorney Fees: You may be required to pay court costs and attorney fees for enforcement actions.
  • Interest on Arrears: Interest may accrue on unpaid child support, increasing the total amount owed over time.

Public Shame and Social Consequences

  • Public Records: Child support orders and enforcement actions are public records, potentially leading to social stigma and embarrassment.
  • Community Pressure: Non-payment can lead to community and familial pressure to meet obligations, adding personal stress.

Non-payment of child support in Arizona has serious consequences designed to enforce compliance and prioritize the child’s welfare. It is essential to understand these potential repercussions and seek legal assistance if you are struggling to meet your child support obligations.

Back Child Support and Bankruptcy: Understanding Your Options with Legal Guidance

Bankruptcy won’t erase previous child support debts, but it can help if you’re behind on payments. You still need to pay ongoing child support during Chapter 13 or Chapter 7 bankruptcy. However, clearing other debts through bankruptcy can free up more money for child support.

Can I Stop Paying Child Support After Filing Bankruptcy?

When filing for Chapter 7 bankruptcy, an automatic stay stops most creditors, but not for unpaid child support. Collection efforts for back child support can persist despite Chapter 7 filing.

Any income earned after filing for Chapter 7 bankruptcy is not part of the bankruptcy estate and can be used for child support and arrears. However, in Chapter 13, post-filing income is included in the estate.  

To enforce a child support obligation, one must seek a request from the automatic stay to proceed. If someone under Chapter 13 bankruptcy fails to meet support payments, the Bankruptcy Trustee may lift the stay for child support recovery.

Will Filing a Chapter 13 Get Rid of My Child Support in Arizona?

In an Arizona Chapter 13 bankruptcy, child support holds the same importance in Federal Bankruptcy Court as in the Arizona Family Court.  Child support is considered a priority debt in Chapter 13, and any child support arrearages must be included in your repayment plan. This plan typically lasts 3-5 years and is based on your ability to repay. 

Chapter 13 bankruptcy differs from Chapter 7 in that it stops collections for support obligations by including the debtor’s earnings in the estate. This allows debtors to manage their debts better through a structured repayment plan. By paying off child support debt, they can reduce what they owe to other creditors, sometimes lowering payments to other creditors by the amount owed in child support.

Paying back child support should be seen as a positive. Many debtors prefer to meet their children’s needs by paying owed child support rather than paying other creditors. However, debtors must stay current on their support obligations. 

Failure to do so will result in not receiving a Chapter 13 discharge. At the end of the Chapter 13 repayment plan, the filer will receive a discharge from their bankruptcy and be current on their Arizona child support payments. Both outcomes are interconnected and must be achieved together.

What Are The Benefits of Filing Bankruptcy When You Owe Back Child Support?

Struggling with overdue child support and debt? Bankruptcy won’t erase child support, but it could offer surprising benefits. Let’s see how it can help manage arrears and secure your financial future for you and your children.

  • Increased debt forgiveness: Child support payments are usually fixed and non-negotiable, limiting how much you can pay to other creditors. Bankruptcy often allows for the forgiveness of a large portion of other debts, enabling you to allocate more money toward your children’s needs.
  • Dedicated payment plans: Chapter 13 bankruptcy requires a structured repayment plan, helping you stay current on payments for essential assets like a house or car. These plans can also ensure you remain up to date on child support, mortgage, car payments, and utilities.
  • Future planning: By staying current on your regular child support payments and paying off any back child support, bankruptcy can discharge your remaining debts, providing greater financial freedom moving forward.

Back Child Support and Bankruptcy: Understanding Your Options with Legal Guidance

Understanding how bankruptcy and back child support work together in Phoenix, Arizona, can be tricky. Bankruptcy can help with some debts, but it won’t wipe out what you owe in child support. That’s because child support is super important, and the law says you still have to pay it even if you file for bankruptcy.

If you’re feeling overwhelmed by debt and struggling to keep up with child support, don’t worry – you’re not alone. Phoenix Fresh Start Bankruptcy Attorneys are here to help. We know all about bankruptcy and can give you advice that’s easy to understand. Plus, we offer a free, no-obligation, stress-free financial analysis to look at your finances and see what might work best for you.

So, if you’re feeling stuck and need a way forward, reach out to Phoenix Fresh Start Bankruptcy Attorneys. Our Phoenix legal team will help you figure things out and take some of the stress off your shoulders. It’s your chance to start fresh and get back on track financially.