When you file for bankruptcy, the automatic stay goes into effect. This is a legal order that stops your creditors from continuing their efforts to collect the debt you owe them. It is your chance for a “breather,” a bit of relief from their collection attempts as you organize your bankruptcy case and begin the process of repaying and discharging your debt.
There are two notable exceptions to the automatic stay: child support and spousal support payments. When you file for bankruptcy, you must continue to make these payments.
The Automatic Stay: What it Does, What it Cannot do
The automatic stay exists to protect you from the stresses of continuing to face collection attempts for debts you cannot repay. These stresses are more than the psychological stress of watching your debt continue to grow and facing interactions with debt collectors; the automatic stay protects you from the physical stresses that follow having your utilities turned off, having your wages garnished, and from being evicted or having your home foreclosed upon.
If a former partner is in the process of establishing or modifying a child support order involving you, the automatic stay does not apply to this order or any collection attempts associated with it. This is because though the automatic stay exists to protect you from stress and harm, it cannot be used to cause your child to suffer because of your inability to afford child support payments. Additionally, your child support debt is not dischargeable through bankruptcy, and these debts take priority over your other debts in your bankruptcy case.
What to do if you are Facing Difficulty Making Child Support Payments
Discuss the situation with an experienced bankruptcy lawyer. No matter what, do not simply stop making your child support payments. Discuss your financial difficulties with your former partner and make the payments you can afford to make; if you refuse to make your child support payments, you can face a contempt of court charge and potentially face criminal penalties.
A family lawyer can help you modify your existing child support order to make it more manageable for you. Your bankruptcy lawyer can refer you to a family lawyer who can help you with this process. Once your bankruptcy is underway, you will repay your child support debt. With a Chapter 7 case, you will do this by repaying your former partner with the proceeds from your liquidation. With a Chapter 13 case, you will repay your child support debts as part of your repayment plan.
Work with an Experienced Libertyville Bankruptcy Attorney
If you are considering filing for bankruptcy to get your finances in order, contact our team of experienced bankruptcy lawyers at Newland & Newland, LLP to set up your initial consultation with us. We can answer any questions you have and start working with you to develop your bankruptcy case. Do not wait to contact us and get started. Schedule your consultation in our office today. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Annie Spratt)