Effect of Bankruptcy on Child Support

Effect of Bankruptcy on Child Support

Generally speaking, the filing of Bankruptcy by a payor spouse will have no affect on the payor parent’s child support obligation. Even the automatic stay on collecting debts created upon the filing of a Bankruptcy petition does not bar the collection of child support (11 U.S.C. §362(b)(2), as amended by Public Law 103-394, effective October 24, 1994). Child support debts are generally non-dischargeable in Bankruptcy. There are two (2) exceptions to this rule:

1. Where the child support debt has been assigned to another entity, voluntarily or by operation of law, or otherwise (11 U.S.C. §523(a)(5)(B)) other than a debt assigned pursuant to 42 U.S.C. §602(a)(26) and;

2. Where the debt although designated as child support is in fact not child support (11 U.S.C. §523(a)(5)(B), the court may look beyond the label given the debt by the parties to determine the true nature of the obligation. (In re: Marriage of Clements (1982, 1st Dist.) 134 Cal.App.3d 737, 184 Cal.Rptr. 756).

Child support debts pursuant to settlement agreement or court order are now seventh in priority (ahead of tax claims) in Bankruptcy (11 U.S.C. §507(a), as amended by Public Law 103-394, effective October 24, 1994).

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