Child support and bankruptcy: what happens to support and arrears

Bankruptcy can wipe out credit card balances, medical bills and many other debts. Child support is different. Federal bankruptcy law gives support owed to a child special treatment at almost every step: it can’t be discharged, most collection continues while the case is open, it is paid ahead of other unsecured debts, and a Chapter 13 plan has to provide for it in full.

This guide explains how those rules work for both parents, using the federal Bankruptcy Code in Title 11 of the U.S. Code. It is general information, not legal advice. Bankruptcy is complex, and the details of any case depend on the chapter filed, the court and the state’s support laws, so the last section points to where to get help.

Child support is a domestic support obligation

The Bankruptcy Code groups child support, alimony and similar payments under one term: a domestic support obligation. Under 11 U.S.C. § 101(14A), that means a debt in the nature of support for a spouse, former spouse or child of the debtor, set or able to be set by a divorce decree or separation agreement, a court order, or a decision of a government agency. It includes support owed to the other parent and support owed to or recoverable by a government unit, such as a state that paid public assistance for the child. It also includes interest that builds up on the debt under state law.

Two details in the definition matter in practice. First, the label on a payment doesn’t decide it. A payment counts as support if it is in the nature of support, whatever the order calls it. Second, the debt can arise before or after the bankruptcy is filed, so both past-due support and support that comes due during the case are covered.

Why child support can’t be discharged

A discharge is the court order that releases a debtor from personal liability for debts. It is the main goal of most personal bankruptcies. But 11 U.S.C. § 523(a)(5) excepts any domestic support obligation from a Chapter 7 discharge, and 11 U.S.C. § 1328(a) carries the same exception into Chapter 13. The federal judiciary’s guide to discharge in bankruptcy lists debts for child support and alimony among the most common types that survive.

So after the case ends, the paying parent still owes every dollar of support that was due, plus any interest the state charges. The guide to back child support, arrears and interest explains how those balances build and how interest works state by state.

Other debts from a divorce, such as a property division or a promise to pay a joint credit card, are handled differently. They are not support, so a separate rule applies: they generally survive a Chapter 7 discharge but can be discharged in Chapter 13. Whether a particular divorce debt is support or property division is a question the bankruptcy court decides, and it is one of the reasons to get legal advice before filing.

What the automatic stay does and doesn’t stop

Filing a bankruptcy petition creates an automatic stay, which halts most collection activity against the debtor. Support is a major exception. Under 11 U.S.C. § 362(b)(2), the stay does not stop:

• Family court cases. Cases to establish paternity, to set or modify a support order, about custody or visitation, about domestic violence, and most divorce proceedings can start or continue.
• Collection from property outside the estate. Support can still be collected from property that is not part of the bankruptcy estate.
• Income withholding. Withholding from pay for support continues under a court or agency order or a statute, even when the income is property of the estate.
• License actions. Driver’s, professional and recreational licenses can still be suspended or restricted under state law.
• Credit reporting. Overdue support can still be reported to consumer credit bureaus.
• Tax refund intercepts. Federal and state tax refunds can still be intercepted for past-due support.
• Medical support. Orders for health coverage under the child support program can still be enforced.

These are most of the tools described in how child support is enforced. The main thing the stay can pause is collection from property that belongs to the bankruptcy estate, such as seizing property the trustee is administering. In Chapter 13, the estate also includes wages earned after filing, under 11 U.S.C. § 1306, which is why the specific exception for income withholding matters. A parent or agency unsure whether an action is covered can ask the bankruptcy court for relief from the stay.

Chapter 7: support claims are paid first

In a Chapter 7 case, a trustee sells property that isn’t exempt and pays creditors in a fixed order. Under 11 U.S.C. § 507(a)(1), unsecured claims for domestic support obligations are first in line, with support owed to the parent or child ahead of support assigned to a government unit. Only certain trustee expenses come before them.

Property the debtor keeps as exempt is normally protected from old debts, but not from support. Under 11 U.S.C. § 522(c), exempt property remains liable for a domestic support obligation. Whatever isn’t paid during the case stays owed afterward, because the discharge doesn’t reach it. The judiciary’s Chapter 7 overview gives the wider context.

Chapter 13: arrears in full and support kept current

Chapter 13 is a repayment plan lasting several years. It treats support in three ways.

Past-due support is paid in full. Support arrears owed when the case is filed are a priority claim, and under 11 U.S.C. § 1322(a)(2) the plan must pay priority claims in full unless the holder agrees to something different. There is one narrow exception for support assigned to or owed to a government unit: the plan can pay less than the full amount only if it commits all of the debtor’s projected disposable income for 5 years.

Current support has to be paid as it comes due. Under 11 U.S.C. § 1325(a)(8), the court can confirm a plan only if the debtor has paid all support that came due after filing. Failing to pay that support during the case is a ground for dismissing it or converting it to Chapter 7 under 11 U.S.C. § 1307(c).

No discharge until support is paid. Before a Chapter 13 discharge, the debtor must certify that all support due up to that point has been paid, including the arrears the plan provided for. The judiciary’s Chapter 13 overview describes the same steps.

For a paying parent who is behind, this means a Chapter 13 plan can spread arrears over the plan’s term as part of the regular plan payment, but it can’t reduce what the child is owed.

What the receiving parent can do

A parent owed support has more protection than most creditors. A federal information memorandum on the bankruptcy changes made in 2005, from the Office of Child Support Enforcement, summarizes them: support claims come first, enforcement continues during the case, and trustees must notify the parent owed support and the state child support agency. In both Chapter 7 and Chapter 13, the trustee must tell that parent about the right to use the state agency to collect, and when the debtor receives a discharge, must send the parent and the agency the debtor’s last known address and employer.

Practical steps include keeping the case open with the state agency, reading every notice from the bankruptcy court, and filing a proof of claim for past-due support by the court’s deadline so it is paid through the case. The arrears and interest calculator gives an estimate of a balance to compare with the agency’s records, but the agency’s or court’s payment history is what counts. The federal directory of state and tribal child support agencies links each state’s program.

What the paying parent can do

Bankruptcy can free up money for support by clearing other debts, but it doesn’t change the support order. If income has dropped, the step that changes future support is a modification, and the stay doesn’t block that case. The guide to how to modify child support explains how a review works, and the modification calculator compares an existing order with the current guideline amount. That guideline amount is an estimate, and courts can deviate from the guidelines. For job loss or disability, see child support when a parent is unemployed or disabled.

Getting legal help

Whether to file, which chapter fits and how a plan should treat support are decisions to make with a bankruptcy attorney. A parent who can’t afford one may qualify for help from a legal aid program, and some bankruptcy courts list free or low-cost help on their websites. The state child support agency can explain how a bankruptcy affects a specific support case and its records, but agency attorneys represent the state, not either parent.