Chapter 7 Bankruptcy Explained
If you’re approaching Chapter 7 bankruptcy and owe child support, knowing just how it impacts you is essential. Chapter 7 bankruptcy offers the debtor a fresh start while paying off debts. How does this apply to your child support? This section comprehensively explains Chapter 7 bankruptcy and what happens to your child support while employing Chapter 7 bankruptcy techniques.
What does it mean to discharge child support debt and file bankruptcy? Why is child support a priority debt in bankruptcy? The actual day-to-day dealing with the bankruptcy court and your child support will also be addressed. With this practical knowledge, you will have everything you need to make an informed decision regarding your child support obligation while going through Chapter 7 bankruptcy.
Child Support Legalities Amid Bankruptcy
Chapter 7 bankruptcy is not a “child support elimination” plan, even if they are tough to pay. The statutes are very certain as they refer to the treatment of kid support debt. Kid support debt is one of the very few debts that are not dismissed, with ongoing kid support to be paid after the bankruptcy is over and any past-due kid support owed when the bankruptcy begins to stay owed after the bankruptcy is done.
Kid support is what bankruptcy laws term a “priority debt,” indicating it is given preferential treatment in the bankruptcy process. Kid support is a ground that requires to be considered by the bankruptcy judge first to determine how much money must be paid each period in kid support.
If the judge identifies that domestic support obligations should be paid, then that sum of cash must be paid first and every month before anything else. Most of the exacting laws and the bankruptcy judge help ensure that domestic maintenance obligations are paid, as they are called officially.
Managing Financial Responsibilities
Mastering Financial Responsibilities, especially when experiencing Chapter 7, is critical because one has a continuous obligation on the issue of child support. Under the bankruptcy process, you will work closely with the bankruptcy trustee to evaluate the financial position, including income, assets, and liabilities.
Although bankruptcy might provide you with a fresh start in your financial life, you should note that child support, considering the child’s welfare comes first, is considered a priority debt and, therefore, cannot be discharged.
Therefore, you should master the art of managing your finances since you must have a budget to ensure you can meet your child support obligation, which is a legal requirement. A realistic budget that prioritizes paying child support can allow you to maintain the obligation of caring for your children even- though you are struggling financially.