Using Bankruptcy To Manage Dsos And Other Divorce
Even though support and some other divorce-related debts cannot be discharged in a Chapter 7 case, they can often be managed in a Chapter 13 case. Chapter 13 is a repayment plan under the protection of the bankruptcy court. It is a global management plan in that all of the debtors debts are treated in the plan in some way.
Divorce And Bankruptcy In Georgia
In todays economy, many couples are struggling with debt. Divorce puts further strain on a familys finances. After a divorce, the income and assets that supported one household now must support two.
Located in Atlanta, the law office of Jody A. Miller provides creative and effective legal counsel to clients throughout north Georgia. For more than 25 years, attorney Jody Miller has been helping clients manage their debt and structure sound divorce settlements that help protect clients if their ex-spouse files bankruptcy after the divorce.
Is Unpaid Child Support Illegal
It is a misdemeanor to fail to support your dependents. Back child support becomes a felony in Georgia when a person reaches the third offense for failing to pay or leaves the state. Once arrested for criminal nonsupport, a person could spend one to three years in prison.
After being arrested for failing to pay back child support, a noncustodial parent could find it even harder to earn the income necessary to resolve financial and legal problems. Having a criminal history for either misdemeanor or felony child support payment charges could negatively impact a persons ability to gain employment or find a place to live. This lack of income has the potential to cause a vicious cycle of child support-related charges.
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Getting Help Making The Decision To File For Bankruptcy
Making the decision to file for Chapter 7 bankruptcy is never an easy one, but there is help available to you. Your case is unique. When you work with Jeffrey B. Kelly, you gain insight into what the best options are for your needs. Contact the Law Offices of Jeffery B. Kelly today to discuss your needs. Call us now at 770-637-1756 for a consultation.
Which Comes First: Divorce Or Bankruptcy
Whether to first file for divorce or bankruptcy will depend entirely on your unique situation. Generally, if you and your spouse are on amicable terms, it can be advantageous to file bankruptcy first if your joint income qualifies you to file a Chapter 7 bankruptcy. This can also help to streamline the property division process in an eventual divorce. Chapter 7 can eliminate most unsecured debts, including:
- Debt from medical or hospital bills
- Personal loans
- Utility bills
However, Chapter 7 will not discharge or eliminate all types of debt. You will still be responsible for paying alimony or spousal support payments, child support obligations, student loan debt, certain recent tax debt, court fees, government fines or penalties, and more.
When you are not eligible to file a Chapter 7 bankruptcy, it may be beneficial to divorce first before filing bankruptcy separately. This is for two main reasons: 1) Filing a Chapter 13 bankruptcy can take far too long for a couple planning to divorce 2) This could allow both spouses to meet the eligibility requirements for a Chapter 7 bankruptcy separately.
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Chapter 7 Bankruptcy Does Not Get Rid Of Your Obligation To Pay Ongoing Child Support And Back Child Support
By Baran Bulkat, Attorney
If you have any outstanding child support debt, filing for Chapter 7bankruptcy will not wipe out your obligation to pay it. In addition,Chapter 7 will not stop a legal proceeding to establish or collect childsupport. Read on to learn more about what happens to child support debtin Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Does Not Stay Actions To Collect Child Support
Whenyou file for Chapter 7 bankruptcy, the automatic stay stops mostcreditors from coming after you to collect their debts. However, childsupport debt is an exception to this rule. The automatic stay does notprevent or delay a lawsuit to establish child support or collect it fromproperty that is not part of your bankruptcy estate.
InChapter 7 bankruptcy, property acquired after your filing date is notconsidered property of the bankruptcy estate. This includes any wagesearned after filing your case. Since your post-bankruptcy earnings arenot property of the estate, child support creditors are free to go afterthem during your bankruptcy.
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Contact A Chapter 13 Bankruptcy Lawyer Servicing Fayetteville Newman & Fayette County
As you can see, filing Chapter 13 bankruptcy is a complicated undertaking. Nonetheless, it may be your salvation, providing a new, healthy beginning to your financial life. Having the assistance of The Dolhancyk Law Firm will be invaluable. The Dolhancyks are a highly qualified, compassionate legal team with the experience and skill to see you through this difficult period with as little stress as possible. You can reach them by phone or through the contact form on their website.
The Dolhancyk Law Firm serves clients throughout Peachtree City, Newnan, Fayetteville, Fayette County, Coweta County, and Spalding County.
Get Started By Contacting An Attorney
When family and financial issues intersect, working with an attorney knowledgeable in both legal areas can prove to be beneficial. Get started by contacting an attorney at our offices in Alpharetta, Atlanta, Cumming or Marietta. Schedule a free consultation by calling or emailing us through our online contact form.
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Simultaneously Filing For Divorce And Bankruptcy Can Be Detrimental
Filing for divorce and bankruptcy at the same time can cause significant delays. When you file bankruptcy, the bankruptcy court puts an automatic stay in place. This immediately suspends creditors or lenders from contacting you and freezes your property and assets. This freeze can complicate the property division process of divorce. If the family court cannot access your assets in order to divide them, the process may be placed on hold, which will then delay your divorce.
Child Support Payments In Chapter 7 And 13 Bankruptcies
You can’t wipe out a child support obligation in bankruptcyit’s nondischargeable. It’s also a “priority debt” that receives special treatment in bankruptcy. If money is available to pay creditors, child support obligations get paid first.
- In Chapter 7 bankruptcy, if the Chapter 7 trustee sells property that you can’t protect with a bankruptcy exemption, the funds will be applied to the support obligation . Even if you complete your bankruptcy case and receive a discharge, you’ll remain responsible for any child support balance and all amounts that come due after filing.
- In Chapter 13 bankruptcy, you can catch up on your missed child support payments. All arrearages must be paid back in full through your Chapter 13 repayment plan, and you must continue to make your ongoing child support payments. Before you can receive a Chapter 13 discharge, you must certify to the court that you are current on all alimony and child support obligations. Because a Chapter 13 plan cannot exceed five years, excessive child support arrearages can lead to a high monthly plan payment.
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Age Child Support Ends
InGeorgia, child support payments generally stop when the minor child for whomsupport is being provided turns 18 years of age. However, Georgia law permitsfor child support payments to terminate when a child turns 18 or graduates fromsecondary school, whichever occurs later. Child support shall not be requiredafter the child reaches the age of 20, even if they have not completed highschool. According to Georgia law, court ordered child support may end when oneof the below circumstances occurs.
Back Child Support In Chapter 13 Bankruptcy
If your ex-husband files for Chapter 13 bankruptcy, he must pay off all of his priority obligations through his repayment plan. This means that a portion of your ex-husband’s monthly Chapter 13 plan payment will go towards satisfying the back child support he owes you. Your ex must pay off all of his outstanding child support arrears and be current on his ongoing support payments before he can receive a Chapter 13 discharge.
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The Automatic Stay May Provide More Protection In Chapter 13 Bankruptcy
In bankruptcy, the automatic stay does not prohibit efforts to collect child support debt from property that is not part of your bankruptcy estate. However, during Chapter 13 bankruptcy, your earnings are considered property of the bankruptcy estate. As a result, unlike in Chapter 7 bankruptcy, a creditor must get court permission before initiating an action to collect child support from your post-bankruptcy earnings.
Generally, as long as you are making timely plan payments and curing your pre-bankruptcy child support arrears through your Chapter 13, you don’t need to worry about a separate action to collect those amounts outside of bankruptcy. However, the interaction between family law and bankruptcy law is complex and may vary depending on where you live and the assigned judge in your case. As a result, consider talking to a knowledgeable attorney in your area to see how bankruptcy may affect your child support obligations.
Back Child Support Payments Are A Top Priority And Will Get Paid Before Other Debts
A Chapter 7 bankruptcy trustee can sell your nonexempt assets and distribute the proceeds among creditors. However, not all creditors are treated equally in bankruptcy court whether a creditor will get paid depends on what type of Debt it is.
Priority debt such as back child support arrears precedes general unsecured ones like medical bills or credit card payments. A bankruptcy trustee will pay any support arrears first. Child support arrears are required to be paid by a bankruptcy trustee.
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Child Support Modification And Chapter 13 Bankruptcy
Chapter 13 Bankruptcy will not itself stop child support neither the obligation to make continuing payments post-petition nor the obligation to pay pre-petition arrears.
In other words, if an obligor files a Chapter 13 petition, he or she must continue to make child support payments and is still liable for child support arrears. However, he or she can provide for payment of any pre-petition child support arrears over a 3- or 5-year plan. Chapter 13 can help an obligor get caught up with child support, and get his or her other unsecured debt discharged once the Chapter 13 plan is complete.
If an obligor files Chapter 13 bankruptcy and so has an additional monthly payment in the form of a plan payment to make, he or she might be eligible for a modification in child support based on a significant change in circumstances. If a modification is granted, however, this will not change the amount in arrears that the obligor must pay, with interest, through his or her Chapter 13 plan.
Unlike Chapter 7, in Chapter 13 the obligors post-filing income is considered part of the bankruptcy estate. So if an obligee wants an increase in child support or wants to initiate a collection action to collect any past-due post-petition child support, he or she must file a motion for relief from the automatic stay with the bankruptcy court and get the courts permission to do so.
What You Need To Know Getting Started
When you file, you have to do credit counseling within six months of filing or else the process will not begin. There will be paperwork that you need to handle including making a petition to the court to officially kick off the proceedings. One of our Georgia chapter 7 bankruptcy lawyers will be able to guide you.
You need to be ready to show your personal information such as your debts from creditors, your assets, income, and what you typically spend in a given period of time.
Once you file, debt collectors are no longer going to be able to call you all the time.
You will have a trustee assigned to oversee your bankruptcy. They are an attorney who is specially appointed to serve as a trustee in a certain geographical area. They are in charge of reviewing your assets and debts.
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How Does Chapter 7 Help Child Support Arrears
Its important to note that if you owe any child support arrears or back child support debt, it will not be wiped out by filing for Chapter 7 bankruptcy. This is because, under the bankruptcy law, priority debts are nondischargeable in bankruptcy, and as a result, they cannot get eliminated with your discharge of all other obligations.
Therefore, you must keep making ongoing child support payments if you are in Bankruptcy. The child support arrears will remain with you for the duration of your obligation.
Talk To An Experienced Bankruptcy Attorney Today
If you have an existing order to pay child support and have back child support, you must get expert advice. An attorney skilled in Bankruptcy and child support arrears can help get the debt relief that will matter.
Filing a Chapter 7 Bankruptcy can free up income to allow you to make your child support payments. Filing bankruptcy can eliminate other Debt and prevent a creditor from taking your income and property.
Bruce Law Firm has bankruptcy lawyers familiar with how to put the bankruptcy code to use to help resolve back child support debt. If you have a child support obligation and need help, contact our office for a free consultation. Bankruptcy can provide the debt relief you need to get your life back on track.
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How Can Chapter 7 Bankruptcy Help Me
One of the questions that we always want to know is how a bankruptcy in Georgia is going to help our clients. In a Chapter 7 situation, a Chapter 7 liquidates or eliminates all unsecured debt such as credit cards, such as personal bills, such as medical bills, delinquent rent, things like that. Now, if youre going to keep your car, or keep your house, or keep your apartment, of course, you have to keep the current payments made. It doesnt discharge any debts that are current after the filing of a bankruptcy.
Say, for instance, you were in an automobile wreck and you have a lot of medical bills. Those medical bills are now in collection. A Chapter 7 would discharge those medical bills many times. If you have any questions, please give our office a call. Wed be more than happy to help you.
What Happens If A Parent Falls Behind On His Or Her Child Support Payments
Each installment of court-ordered child support is to be paid according to the date set out in the order. When a person does not comply with the order, the overdue payments are called arrearages or arrears. Judges have become very strict about enforcing child support orders and collecting arrearages. While the person with arrears can ask a judge for a downward modification of future payments, the judge will usually insist that the arrearage be paid in full, either immediately or in installments.
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What You Need In Order To File For Chapter 7 Bankruptcy
When filing any bankruptcy, your income is going to be a factor. There are specific guidelines for income and expenses allowed for individuals filing a Chapter 7 bankruptcy. If you make under a certain amount, you automatically qualify for Chapter 7. If you are above a certain threshold as governed by Georgias allowances, you will have to complete a Means Test to determine your eligibility. The idea is that the court is trying to determine how much you have left over after you paid your monthly expenses. It may turn out that you are not eligible for bankruptcy because of your debt-to-income ratio. One of our Georgia Chapter 7 bankruptcy lawyers can help you with this.
The courts filing fee for a Chapter 7 bankruptcy is $335 to file.
What Is Chapter 7 Bankruptcy
Many people ask us what a Chapter 7 bankruptcy is in Georgia. It is a straight liquidation. Thats what it is termed in the bankruptcy code. A Chapter 7 bankruptcy allows you to discharge your debts. Mainly, it would be unsecured debts, medical bills, credit cards, personal loans, and things like that.
A Chapter 7 or even a Chapter 13 does not discharge student debts it doesnt discharge alimony, child support, or some tax debts, for instance, such as income taxes that were accrued within the last two to three years. It does allow you to discharge all other debts. If you have a car payment, of course, you have to keep making your car payment if you wanted to keep the car. You could surrender a car and you would not be required to make any payments, and the same thing with your mortgage, as well. If you have any questions concerning what is encompassed or was is included in a Chapter 7 bankruptcy, just give our office a call. Thank you.
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