How is Child Support Debt Treated in Bankruptcy for Coloradoans?

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Like other jurisdictions, the State of Colorado presumes that children should be financially supported by both biological parents. This is the default position on the matter. Under a limited number of scenarios – such as relinquishing parental rights via adoption – a parent may be excused from his or her financial obligation as a parent, but in nearly all cases parents are required to provide regular material assistance. What happens, however, if a parent in Colorado decides to declare bankruptcy – what happens to child support debt?

In this post, we will discuss the fate of child support debt when a parent declares bankruptcy. As readers will see, the result is not what most people would expect.

Child Support Debt is Non-Dischargeable

Bankruptcy is a federal process, and it is the avenue people take when they need to obtain a fresh start and either eliminate or restructure existing debts. Many people assume that Chapter 7 bankruptcy will eliminate child support debt that has accumulated over time; the truth, however, is that child support debt cannot be wiped out in Chapter 7. The same is true for alimony and other “domestic support obligations.” When someone accumulates child support debt, that debt is nearly impossible to discharge. If a person initiates a Chapter 7, they may be able to discharge other debts, but any child support debt and alimony debt will remain.

Chapter 7 will still allow a Coloradoan to discharge other debts, and this can often improve a person’s circumstances and make child support debt more manageable. This is something that should certainly be kept in mind by those struggling with back child support. If a person discharges a large sum of money in unsecured debts, for instance, this might be helpful in paying back child support obligations.

Child Support Debt is Paid Back First in Chapter 13

In a Chapter 13 bankruptcy, the debtor restructures existing debts by developing a repayment plan.  Hence, the primary goal of Chapter 13 is to pay back debts over time, rather than eliminate debts entirely. In Chapter 13, child support debt actually has a higher “priority” than other debts, and so this debt will be paid back more quickly under this form of bankruptcy. Because Chapter 13 “prioritizes” back child support in this way, this process might be a viable option for those struggling with child support debt.

Contact the Drake Law Firm for More Information

Coloradoans who’ve racked up a substantial amount of child support debt will be rudely surprised if they intend to use bankruptcy as a quick solution. As we’ve discussed, the federal government is quite serious when it comes to preventing such debt from being eliminated. But, although such debt cannot be wiped through bankruptcy, the bankruptcy process can still be helpful for those having difficulties in this area. If you’d like to learn more, please contact the Drake Law Firm today by calling 720-797-6790.