With the coronavirus pandemic, millions of Americans were forced out of work. Small and medium-sized businesses were shut down and large companies have been struggling to stay afloat. Virtually anyone who works in retail, dining, salon services, travel, tourism, entertainment, and transportation has been impacted, but that’s only a short list.
Due to the unemployment crisis resulting from COVID-19, countless people across the nation have experienced financial hardship. In effect, they’re having difficulty paying their child support and spousal support payments. If you’re such an individual and you’re considering filing Chapter 7 or Chapter 13 bankruptcy, you may be curious to know if child support and spousal support debt can be discharged in bankruptcy.
Child & Spousal Support are Non-Dischargeable
While many types of debts can be discharged in bankruptcy, child support and spousal support debt cannot be reduced or discharged (wiped out) in Chapter 7 or Chapter 13 bankruptcies. Why? Because lawmakers decided they were too important to be discharged. They felt that it was in the public’s best interests to exclude them from people’s bankruptcy discharges.
If your financial circumstances have changed and you cannot pay child support or spousal support, bankruptcy is NOT an option. Bankruptcy cannot reduce your payments or what you owe, but that doesn’t mean you’re out of options.
If you cannot afford your child or spousal support payments due to the novel coronavirus or because of another reason that affected your finances (e.g. unemployment, disability, illness, etc.), the best solution is to petition the court for what is called a modification.
“Once you ask the court to modify the amount of child support, the court will make its decision based on the current circumstances (mainly both parents' income and time-share with the child). This means that the child support amount could go either up or down,” according to the California Courts.
Spousal support is much like child support. If you need to change your monthly spousal support obligation, you can ask the court to change the amount, however, you’ll need to prove that you’ve experienced a significant “change in circumstances.”
Need help modifying your existing child or spousal support order? If so, contact Burch Shepard Family Law Group today.