How does bankruptcy impact child support?

 Posted on April 16, 2024 in General Bankruptcy Topics

Divorce affects your finances in many ways. When you face monetary difficulties after a marital split, bankruptcy can provide relief from overwhelming debts.

It is important to understand the legal process and how it can affect your child support responsibilities.

Child support priority

In Maryland, filing for bankruptcy does not affect the receipt or payment of child support. Maintenance obligations are a high priority in these proceedings. If a former partner owes you child support, the law considers it an asset. If you are the person paying child support, the amount you owe is a non-dischargeable debt. This regulation means that even if you file for insolvency, you are still responsible for fulfilling the payments outlined in your divorce settlement.

Bankruptcy options

You sell your assets to repay creditors in a Chapter 7 bankruptcy. However, child support payments are exempt from discharge.

Chapter 13 bankruptcy allows you to create a repayment plan to settle your debts over three to five years. When filing, the court considers child maintenance payments a priority debt and requires their inclusion in the repayment plan. Failure to include child support amounts in the plan can lead to the dismissal of your case.

Bankruptcy and support payments

Filing this legal action halts most creditors' collection actions. However, this automatic stay does not apply to child support enforcement actions.

You cannot eliminate support obligations, but you can seek a modification of the payments based on changed financial circumstances. If your income decreases, you may petition the court to modify your child support agreement to reflect your current monetary situation.

Knowing the bankruptcy laws can help you address financial difficulties while ensuring that the well-being of your children remains a top priority.