Generally, bankruptcy does not impact child support payments. Thus, if your ex-spouse is PAYING child support and files for bankruptcy, the child support payments must continue to be made. The bankruptcy has no impact. Likewise, a bankruptcy filed by an ex-spouse who is RECEIVING child support does NOT impact the child support. The paying spouse is obligated to continue making those payments. If child support payments are past due, again, bankruptcy will have little impact because past due child support cannot be discharged or otherwise reduced in a bankruptcy proceeding.

The interplay between bankruptcy and child custody law is complex. To offer some explanation, the experienced Calvert County, MD, Child Custody Attorneys at the Law Office of Robert Castro provide this brief summary of how bankruptcy impacts child support. If you have questions, call us at (301) 870-1200 or use our contact page. We are Maryland Family Law Attorneys with offices in Waldorf, Maryland. To start, we briefly describe how bankruptcy works.

What is a Bankruptcy Filing?

Bankruptcy is a legal process governed by federal law that allows individuals and businesses to eliminate or reorganize their debts. For our purposes, we will simplify matters by saying that on the day a bankruptcy is filed, the debtor’s possessions—assets and debts—cease to belong to them. Instead, they are now owned by a “Trustee” assigned to the case.

However, beyond that filing date, whatever the debtor earns—like wages—is owned by the debtor. That is, new earnings are NOT “taken” by the Trustee. Thus, going forward after the bankruptcy is filed, if the debtor is obligated to pay child support, that obligation remains, and the debtor’s earnings are available for payment. Likewise, if the debtor receives child support payments, those post-filing payments will be available for paying bills, buying food, clothing, etc.

Regarding debts that a bankruptcy is trying to eliminate or reduce/reorganize, past-due child support is NOT a type of debt that can be eliminated or reduced. However, many other types of debt, including credit card debt, hospital bills, personal loans, and some student loans, can be eliminated or reduced.

What if the Paying Spouse is in Arrears?

Bankruptcy filings are most complicated where the debtor is obligated to pay AND is past due on one or more child support payments. Such past-due payments are considered priority debts, and, as noted above, those debt obligations cannot be discharged or reduced. In other words, filing for bankruptcy will NOT allow a child-support-paying parent to avoid paying the child support that is due. So, there is no reason to fear a bankruptcy filed by your ex-spouse.

In fact, a bankruptcy filing by your ex-spouse might actually be a good thing if your ex-spouse is in arrears. This is because your ex-spouse might be able to eliminate other debt — like credit card payments — through discharge, debt reduction, or through payment plans. In this manner, your ex-spouse is eliminating or lowering the amount of money that has to be paid to service his or her debt. So, instead of paying $1,500 a month in “debt servicing,” the amount might drop to $750 a month. That reduction might help your ex-spouse remain current on existing and future child support payments while also helping him or her catch up on past-due amounts.

Contact Waldorf, Maryland Family Law, and Child Custody Lawyer Robert Castro Today

This article has been provided by the Law Office of Robert Castro. For more information or questions, contact our office to speak to an experienced Maryland family law and divorce lawyer at (301) 870-1200. We are Waldorf, MD, Family Law lawyers. Our address is 2670 Crain Highway, Waldorf, MD, 20601.