During these challenging times, many people are finding themselves without an income and in debt. Bankruptcy filings may increase after the coronavirus/COVID-19 pandemic. Bankruptcy allows individuals to discharge or restructure debt. Some priority debts are not dischargeable, including child support. An individual will still be responsible for missed child support payments and future child support obligations.
If you have questions about child support, alimony, or post-separation support in North Carolina, talk to the family law attorneys at Caulder & Valentine Law Firm, PLLC.
You Cannot Discharge Child Support in Bankruptcy
In a bankruptcy, debts generally fall into the categories of dischargeable and nondischargeable debt. Under U.S. Bankruptcy Code Section 523, a discharge in bankruptcy does not discharge an individual debtor for certain debts, including “domestic support obligation.” Domestic support obligations include child support, spousal support, or alimony incurred in the course of a divorce, separation, or separation agreement.
Bankruptcy will also not discharge future and continuing obligations. For example, if a parent is ordered to provide child support to their 10-year-old child until age 18, a bankruptcy will not excuse their continuing obligation to provide support for the next 8 years.
Bankruptcy does not erase missed child support payments. If the non-custodial parent has missed $2,000 in past child support payments, that debt will follow the non-custodial parent after the bankruptcy process is over.
Collecting Child Support During and After Bankruptcy
Even if the non-custodial parent does not have an income, they may still be responsible for a minimum payment. As of January 1, 2019, when a parent who is obliged to pay child support makes less than $1,108 per month, the guidelines require a minimum support order of $50 per month.
If the court finds a parent is voluntarily unemployed or underemployed to deliberately or in bad faith avoid child support obligations, the court may calculate child support on the parent's potential income.
If the non-custodial parent claims not to have an income or claims to be unable to find a job, there are other ways of enforcing child support orders with income withholding from:
- Unemployment insurance benefits (UIB),
- Workers' comp benefits,
- Social Security benefits,
- Retirement benefits,
- Disability benefits, and
- State and federal income tax refunds.
Modifying Child Support and Bankruptcy
Before filing for bankruptcy, a non-custodial parent may seek to modify their child support obligations based on financial change of circumstances. A change in circumstances to justify a change in child support generally requires a difference of 15% or more between the child support payable and child support.
For example, a non-custodial parent loses their job after layoffs related to coronavirus. The parent is unable to find another job and loses their primary source of income. If the parent seeks a modification of their child support order, the drop in income may be enough to warrant a reduction in their child support orders.
However, like bankruptcy, a modification of child support is not generally retroactive. If the parent waits three months before requesting a modification, the parent will still be liable for the full amount of any missed child support payments.
North Carolina Family Law Firm
If you have any questions about child support obligations, spousal support, or modifying support orders in North Carolina, contact the Caulder & Valentine Law Firm, PLLC. Contact us today online or by phone at 704-470-2440 for a consultation.