Child Support and Alimony in Bankruptcy Cases in Texas

 Posted on March 25, 2024 in Child And Spousal Support

When facing debt, the option of filing for bankruptcy can provide relief and a new beginning. However, for those with child support or alimony obligations, the process becomes more complex. These financial responsibilities are treated differently in bankruptcy cases, and a Texas lawyer can help you determine the specifics of your situation.

Child Support is a Non-Dischargeable Debt

One of the fundamental principles of bankruptcy law is the discharge of eligible debts. However, child support obligations are explicitly excluded from discharge under both Chapter 7 and Chapter 13 bankruptcy. This means that even after completing the bankruptcy process, the debtor remains legally responsible for paying any outstanding child support arrears or future payments.

The rationale behind this exemption is the recognition that child support is a fundamental obligation owed to the child, not the custodial parent. As such, the Texas Family Code upholds the child's right to receive financial support, regardless of the parent's financial circumstances.

Automatic Stay and Child Support

When a bankruptcy petition is filed, an automatic stay goes into effect, temporarily halting most collection actions against the debtor. However, this stay does not apply to establishing or modifying child support orders or collecting child support payments from sources such as wages or tax refunds.

Consequently, if you are behind on child support payments, the custodial parent or the Attorney General's office can continue to pursue collection efforts, including wage garnishments or contempt proceedings, even after you have filed for bankruptcy.

Alimony is a Dischargeable Debt, With Exceptions

In contrast to child support, alimony (also known as spousal maintenance in Texas) is generally a dischargeable debt in bankruptcy cases. This means that if you have outstanding alimony payments, they may be eligible for discharge, provided certain conditions are met.

However, there are exceptions to this rule. Alimony payments owed to a former spouse or child of the debtor for that spouse's or child's support are considered non-dischargeable in bankruptcy. Additionally, any alimony payments that are designated as non-dischargeable in the divorce decree or separation agreement will remain enforceable after bankruptcy.

Prioritizing Domestic Support Obligations

Under bankruptcy law, child support and certain alimony payments are classified as domestic support obligations (DSOs). These debts are prioritized, meaning they must be paid before other unsecured debts are addressed in the bankruptcy case.

In a Chapter 13 bankruptcy, where the debtor reorganizes their debts and makes payments through a court-approved repayment plan, DSOs must be paid in full over the plan's life. Failure to do so can result in the dismissal of the bankruptcy case or the denial of a discharge.

Contact a Boerne, TX Bankruptcy Attorney

Understanding the challenges of child support and alimony obligations during a bankruptcy case can be daunting. It is essential to consult with a New Braunfels, TX bankruptcy lawyer who can assess your unique situation and make sure that your rights and responsibilities are adequately considered during the proceedings. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation with a lawyer who is currently a Director of the San Antonio Bankruptcy Bar Association so that you will be in good hands.