Data compiled by the U.S. Census Bureau shows that American parents pay more than $33 billion in child support annually. Those same statistics show that only half of the custodial parents receive their total support award. That means there’s a lot of unpaid child support debt out there.
State and federal laws allow government agencies to assess fines and interest, garnish wages and suspend a parent’s license if they neglect to pay child support. These penalties may affect a parent’s ability to retain or secure employment, leading a parent to file bankruptcy. Bankruptcy doesn’t eliminate a parent’s requirement to pay what they owe on child support, however.
Why doesn’t bankruptcy do away with a parent’s child support obligation?
Most individuals realize that they can discharge consumer debts in bankruptcy if they lack the means to pay those debts off. While you may be able to eliminate your obligation to pay back personal loans, medical bills and credit card debts by filing bankruptcy, domestic support obligations (DSOs) are exempt from this list of dischargeable liabilities.
Debts that someone owes per a separate court order, such as a divorce decree, fall under the umbrella of DSOs. Child support and alimony are both DSOs. It’s important to note that a divorcing spouse can’t file a Chapter 7 bankruptcy to avoid obligations pursuant to a property settlement agreement that they’ve entered into, either.
The chief benefit of bankruptcy when a parent is struggling to afford their child support payments is that it can eliminate other debts, making the support payments easier to manage — but that’s still not a viable option for everyone.
If bankruptcy can’t help with a child support obligation you can’t afford, what can?
While bankruptcy may not be an option if you’re struggling to pay alimony or child support, a modification of your support order might be. An attorney in Philadelphia can go over the pros and cons of pursuing this option so that you can choose what’s right for you.