Law Office of Allan E. Dunaway, PLC

How will child support affect you bankruptcy?

While the concept of a Chapter 13 is relatively straightforward, the technical details can be complex. The idea behind a Chapter 13 is to allow debtors with regular income the ability to discharge some of their debts while giving them three to five years to pay their debts. For instance, if you have fallen behind in your mortgage, you can use a Chapter 13 to catch up on those arrears. The Chapter 13 also protects your home from foreclosure during this time.

However, determining if you should file a Chapter 7 or a Chapter 13 can be a quite complex decision. For Chapter 7, there is a "means test," which is designed to determine if you earn too much income for Chapter 7 and instead must file a Chapter 13. 

The complexity here can be increased if you have been divorced before you file for bankruptcy. The calculations for the means test include your necessary expenses and your disposable income. If you pay or receive child support payments, these amounts will affect your outcome in the means test and your eligibility for Chapter 7.

If you are not eligible for a Chapter 7, you can file a Chapter 13, and you and your bankruptcy attorney will create a Chapter 13 plan. The plan will lay out your expected income and expenses for the duration of your Chapter 13.

Again, child support may affect this calculation and a bankruptcy attorney can help ensure that your plan and supporting schedules accurately reflect all of your disposable income and your necessary expenses.

Because these calculations will be unique for your specific situation, it is difficult to provide general guidance, and it is helpful to speak with a bankruptcy attorney before you make a decision. 

Source: The Huffington Post, "My Child Support Is Making My Chapter 13 Bankruptcy Tough," Steve Rhode, December 11, 2013

No Comments

Leave a comment
Comment Information
Contact the Firm

Get Sound Advice In A Free Consultation

For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Kentucky Office

Indiana Office

714 Lyndon Lane
Suite 4
Louisville, KY 40222

Phone: 502-785-1005
Fax: 502-412-2258
Louisville Law Office Map

530 East Court Avenue
Jeffersonville, IN 47130

Phone: 502-785-1005
Fax: 502-412-2258
Jeffersonville Law Office Map