All family support obligations, including child support and spousal support (alimony) are generally non-dischargeable in a bankruptcy case. However, both chapter 7 and chapter 13 bankruptcy offer options to help people in financial distress by eliminating other unsecured debts making family support obligations more realistic. Alternatively, your attorney may file for a modification of child and/or spousal support to reflect changes in your current financial situation.
Chapter 7
In a chapter 7 case, all of you unsecured debts will likely be erased, freeing up income to maintain your family support obligations. This type of bankruptcy has the potential to cost you some of your personal property if you do not plan ahead and have a legal strategy in place to protect assets that are not otherwise protected by your states or federal bankruptcy exemptions.
In your bankruptcy petition, you will need to list all family support obligations as "priority" unsecured debts in schedule E. These debts will likely be non-dischargeable unless your attorney can make a strong argument that they are an undue hardship, and should be modified or discharged in part. However, in reality, this is very difficult to get done.
Chapter 13
In a chapter 13 case, your disposable monthly income is used to determine a monthly payment amount that you could afford after all of your allowed expenses have been accounted for. In this type of bankruptcy, no property is liquidated, but exemption planning is still important in order to pass the "best interest of the creditor" test.
As part of your chapter 13 payment plan, you should be able to catch up on arrearages in family support obligations while still eliminating most, if not all of your unsecured debts like credit cards and personal loans.
Talk to an Attorney
If you are looking for ways to get back on your feet financially, talk to a bankruptcy lawyer to find out what services he or she can provide you to help get rid of debt and avoid legal issues with unpaid family support obligations.
