Does California Bankruptcy Wipe Out Child Support?
If you file for bankruptcy in California, you could potentially wipe out a variety of debts or reorganize your debt into a payment plan you’ll be able to handle. That said, there are some types of debts that aren’t eligible to be discharged in a bankruptcy. One example is child support.
That said, filing for bankruptcy can help to reduce the difficulty of paying child support payments. If you’re stuck in a bad financial situation and don’t know what your options really are, then we urge you to contact California Bankruptcy Relief at (888) 748-0025 for a free bankruptcy consultation.
There are many bankruptcy types
In California, there are a number of bankruptcy options that can be filed by individuals or by businesses. However, the vast majority of bankruptcies in California are Chapter 7, Chapter 11, or Chapter 13. As a result, we’ll look at these three types of bankruptcy in this article. If you have questions about other options, including business bankruptcy, contact California Bankruptcy Relief at (888) 748-0025 for a free bankruptcy consultation.
Chapter 7 bankruptcy and child support
If you file Chapter 7, then you are allowed to liquidate your assets in order to pay off creditors and get rid of debt. There are more than a dozen types of debt that can be discharged, like credit cards, medical bills, and others. However, child support is what’s known as a priority debt, which means that it can’t be discharged in a Chapter 7 bankruptcy.
Chapter 11 bankruptcy and child support
With Chapter 11 bankruptcy, the focus on reorganizing debt and it’s almost always filed by corporations or business entities. However, Chapter 11 can be filed by individuals. The way it works is that the debtor comes up with a plan to reorganize debts that considers their assets, income, and coasts. Both the bankruptcy court and the creditors must approve the plan that’s created. As is true of Chapter 7, child support is considered a priority debt and cannot be discharged.
Chapter 13 bankruptcy and child support
If you have a regular source of income and can create a repayment plan that repays your debt within three to five years, then Chapter 13 may be the right choice for you. However, once again it cannot discharge child support debt.
That said, there is one big difference: Chapter 13 allows you to include your child support payments in your repayment plan. You can stretch them over five years, assuming the court accepts that plan. Keep in mind that if you file Chapter 13 and fail to make child support payments after your repayment plan is in place, then the bankruptcy could be dismissed or converted to Chapter 7. As a result, it’s only recommend if you have steady income that you expect to keep coming for the foreseeable future.
Do you have additional questions about bankruptcy filings? Do you want to begin the process? Contact California Bankruptcy Relief at (888) 748-0025 today for a free bankruptcy consultation.