What effect does a bankruptcy filing have on the collection of alimony and child support?
A. A Chapter 7 filing should have no effect on such collections. Although filing bankruptcy stops, or stays, all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless the creditor attempts to collect from the property of the estate. In a Chapter 7 proceeding, property of the estate includes all possessions, money, and interests the debtor owns at the time he or she files. Money earned after the bankruptcy is filed, however, is not property of the estate. Since most child and spousal support is paid out of the debtor’s current income, the bankruptcy should have little impact. A debtor under Chapter 13 must pay all domestic support obligations that fall due after the petition is filed. Failure to do so could result in dismissal of the case. Neither a Chapter 7 nor a Chapter 13 discharge affects future child or spousal support obligations. In other words, even at the conclusion of the bankruptcy proceeding, thes
The result depends on whether the debtor filed a Chapter 7 or a Chapter 13 bankruptcy. A Chapter 7 filing should have no effect on such collections, but a Chapter 13 proceeding may stop the collection activities, at least temporarily. However, neither a Chapter 7 nor a Chapter 13 discharge affects future child or spousal support obligations. In other words, even at the conclusion of the bankruptcy proceeding, these on-going obligations remain.
A Chapter 7 filing should have no effect on such collections. Although filing bankruptcy stops, or stays, all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless the creditor attempts to collect from the property of the estate. In a Chapter 7 proceeding, property of the estate includes all possessions, money, and interests the debtor owns at the time he or she files. Money earned after the bankruptcy is filed, however, is not property of the estate. Since most child and spousal support is paid out of the debtor’s current income, the bankruptcy should have little impact. A debtor under Chapter 13 must pay all domestic support obligations that fall due after the petition is filed. Failure to do so could result in dismissal of the case. Neither a Chapter 7 nor a Chapter 13 discharge affects future child or spousal support obligations. In other words, even at the conclusion of the bankruptcy proceeding, these o
The result depends on whether the debtor filed a Chapter 7 or a Chapter 13 bankruptcy. A Chapter 7 filing should have no effect on such collections, but a Chapter 13 proceeding may stop the collection activities, at least temporarily. Although filing bankruptcy stops, or “stays,” all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless the creditor attempts to collect from the “property of the estate.” In a Chapter 7 proceeding, “property of the estate” includes all possessions, money, and interests the debtor owns at the time he or she files. Money earned after the bankruptcy is filed, however, is not property of the estate. Since most child and spousal support is paid out of the debtor’s current income, the bankruptcy should have little impact. In Chapter 13, however, the code considers the debtor’s earnings as property of the estate, since the wage-earner plan is based on making payments from the debtor’s
