Navigating child support and Chapter 13 bankruptcy in Watertown, NY, can feel quite overwhelming for many people. Especially when it comes to Chapter 13 bankruptcy, you may not know how Chapter 13 handles family law issues and how this will impact your repayment plan.
At Grady BK, PLLC, our goal is to provide our Watertown clients with personalized legal representation as they navigate child support and Chapter 13 bankruptcy in Watertown, NY. We will help you understand your domestic support obligations during bankruptcy in NY so that you know exactly what to expect. In this article, we will be discussing getting bankruptcy help with child support and how this will impact your repayment plan.
How Child Support Is Treated in Chapter 13
Chapter 13 is a popular bankruptcy option that allows you to create a repayment plan to manage your debts. It is specifically designed for those with a higher income, allowing them to pay priority debts over a 3 to 5-year period. After your repayment plan has been completed, certain remaining debts may be discharged (wiped away) so that you can have a fresh financial start.
When it comes to child support and Chapter 13 bankruptcy in Watertown, NY, any domestic support obligations are treated as priority debt. This means that child support will be one of the types of debt that have to be paid in full. Because of this, you will need to keep current on child support payments in order to maintain your repayment plan.
The good news is that when your Chapter 13 repayment plan is created, your income and expenses will be taken into account. So, you should have the resources necessary to keep up on child support payments as long as you stick to the plan.
What Happens if You’re Behind on Child Support
Because New York Chapter 13 bankruptcy treats child support as a priority debt, you must keep up on these payments even when you declare bankruptcy. If you are behind on your child support payments, your repayment plan will be restructured to accommodate back child support during your Chapter 13 plan (the arrears can be paid inside the bankruptcy and you continue to pay the ongoing support directly).
If your financial situation has changed, such as your income being reduced, you can request that your plan be restructured to accommodate this.
If you are consistently falling behind on child support, this could result in child support wage garnishment. Also, there is a significant risk of your entire Chapter 13 plan being dismissed if you do not keep current on your child support payments. You will not be able to finalize your chapter 13 bankruptcy if your ongoing child support is not current.
Automatic Stay Limits in Child Support Cases
When you file for bankruptcy in Watertown, New York, an automatic stay will immediately take effect. This protects you from any collection efforts from creditors for the duration of your bankruptcy repayment plan.
However, when it comes to priority debts like child support, the automatic stay does have some limitations. For instance, as we mentioned above, you may still be susceptible to wage garnishment and other collection efforts if you fall behind on your ongoing payments.
In addition to potential wage garnishment, your ex-spouse could also take legal action against you if you fall behind on your payments. This could result in you receiving contempt of court charges, having your Chapter 13 plan canceled, or facing potential jail time.
Best Practices for Managing Child Support and Chapter 13 Together
Managing Chapter 13 and child support payments together can feel very overwhelming for most Watertown residents. However, as long as you understand how child support impacts your repayment plan, this is a relatively straightforward process.
To avoid running into any issues with your child support obligations or Chapter 13 plan, there are certain things you should do. Here are some examples of best practices for managing these types of financial obligations:
- Stay current: If possible, it is strongly recommended that you make the ongoing child support payment one of the first bills that get paid so that you do not fall behind with the child support payments.
- Create a budget: Once you have gone through the process of filing for Chapter 13 and your repayment plan has been created, you need to stick to a budget. A budget will ensure you can meet your Chapter 13 repayment obligations without falling behind on any essential payments, such as child support.
- Request restructuring: If your financial situation changes during your repayment plan and you’re struggling to meet your child support obligations, you can request restructuring. When you do this, your repayment plan will be reevaluated according to your current financial situation to make adjustments so that you are able to keep up with your payments.
Before you proceed with filing for bankruptcy, it is a good idea to hire a bankruptcy attorney in Watertown to ensure everything goes smoothly.
FAQ:
Can Chapter 13 reduce the amount of child support I owe?
No, Chapter 13 will only help you manage child support arrears; it will not be able to actually reduce the amount you owe.
Will my ex still be able to collect child support during bankruptcy?
Yes, you will still be responsible for maintaining child support payments throughout the duration of your repayment plan.
Watertown’s Top Compassionate Bankruptcy Attorney
Understanding things like child support and priority debt in bankruptcy can be very confusing, which is why you should get legal help from a Watertown bankruptcy attorney. At Grady BK, PLLC, we provide a personalized experience so that each of our clients feels as though they are our only client. We will work with you one-on-one to determine the best bankruptcy options for your situation and how you can navigate child support obligations.
At Grady BK, PLLC, our personalized and simplified approach breaks down the bankruptcy process so that you can proceed with confidence and peace of mind. We are here to answer all of your questions so that you can make educated decisions regarding the best options for your financial situation and your future financial goals.
Contact us today at 315-299-9005 to discuss your financial situation with a Watertown bankruptcy attorney. Our team at Grady BK, PLLC, is here to help you as you navigate child support and Chapter 13 bankruptcy in Watertown, NY.
