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What you need to know about child or spousal support and bankruptcy

On Behalf of | Jan 8, 2021 | Bankruptcy |

Americans pay as much as $33 billion in child support annually. Yet, fewer than one-half of custodial parents ever receive the full amount that a judge orders the non-custodial one to pay.

While many parents understand the consequences of not paying the child support that a judge orders them to pay, some wrongly assume that filing bankruptcy will absolve them of their obligation to pay. 

What types of debts can you discharge in a bankruptcy?

One of the primary purposes individuals file bankruptcy is because they find themselves drowning in debt without any prospects of bringing their balances current. U.S. Bankruptcy laws allow debtors to discharge most debts they might have in a bankruptcy, including personal loans, medical bills or credit card balances. These laws generally don’t allow you to discharge student loans or any domestic support obligations (DSO) debts, though. 

What are domestic support obligations, and why can’t you discharge them in bankruptcy?

Alimony and child support are two examples of DSOs. There’s a difference between how someone comes to have these support payment obligations and may end up owing credit cards, medical bills or personal loan ones. A family law judge relies on state law when issuing a separate order requiring a parent to pay child or spousal support, whereas bankruptcy laws exclusively apply to others. 

The same logic also applies to property settlement situations. A divorcing spouse cannot get out of their obligation to split up property or turn it over by filing for Chapter 7 bankruptcy. 

Why should you still consider filing for bankruptcy anyway?

When your debts are overwhelming, it can be very hard to manage your support payments. Bankruptcy can allow you to eliminate other debts and make it easier to keep up with your familial support obligations.

What you should do if you’re struggling with debt

If there’s one thing that you should know about bankruptcy, it’s that these laws are ever-changing. A bankruptcy law attorney in Roanoke can help you understand what types of debts you can and cannot discharge here in Virginia and suggest alternatives for handling your financial woes.