Avoiding Jail for Delinquent Child Support Arrears

atlanta bankruptcy attorney

Chapter 13 Bankruptcy: Restructuring Domestic Support Obligations

One of the lesser known “powers” of Chapter 13 bankruptcy repayment plans is to allow a debtor that is behind on a domestic support obligation (e.g child support, alimony) to place the amount in arrears into a Chapter 13 bankruptcy repayment plan and stretch out that repayment for up to 60 months.

Over the past few years we have seen an increase in clients seeking federal protection to avoid the very real threat of jail time for failure to pay back support.  For some clients, even though they have obtained a modification of future support payments, the back payments are set in stone and unless they can make a substantial payment on this debt they can find themselves without a license or worse, in jail.

Repayment of Child Support Through the Chapter 13 Bankruptcy Plan

Like all other debts, domestic support arrears can be added into the Chapter 13 case to be repaid over the course of 60 months.  These support payments however are deemed a priority debt and are the first to be paid in the course of a case.  Most of our cases are written for 60 months to allow for the lowest payments by our clients to the court however in some cases debtors may be out of bankruptcy faster than this.

Once a client files for Chapter 13 bankruptcy protection they are immediately relieved of the back payments and are only required to resume making their normal court ordered payment going forward.  Of course their arrearage payment will be factored into their monthly court payment to pay all of their bills but 99.9% of the time that payment is still MUCH less than what they had been ordered to pay by the court.  As long as the client maintains their monthly support payment and trustee payment each month the other side is prevented from taking any against the client.

Bankruptcy as a Negotiation Tool

For the most part, our clients facing bankruptcy are very rational and are looking for the easiest and most cost effective way to deal with their financial problems.  Unfortunately for my colleagues that handle divorce and family law matters this is not always the case and many times the emotional issues cloud logic and practicality.

When this happens it is sometimes necessary to present how bankruptcy can extend their ability to receive their arrearage payments to the side that is unwilling to come to a reasonable compromise.

Our firm often consults on these type of cases where we provide a potential Chapter 13 repayment plan option so that the other side can decide if they really want to wait 5 years to collect their back payments as opposed to working out a repayment without the bankruptcy court’s involvement.

Atlanta Bankruptcy Attorneys

If you are in the process of getting divorced or are facing collection issues on a domestic support obligation there are options available.  Contact Saedi Law Group today to find out what options are available.

 

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