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What happens to child and spousal support in bankruptcy

Divorced Texas parents cannot discharge child support or alimony in bankruptcy, but they may be able to discharge other elements of the divorce settlement in certain circumstances. Fewer than half of people who are supposed to get child support receive the full amount. The legal system takes failure to pay child support seriously, and it may be punished through garnishing wages, fines and even jail time.

However, with a Chapter 13 bankruptcy, a parent might reorganize child support payments and pay them back over a period of three or five years. During that time, no action can be taken against the parent for the debt. Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy acts as a kind of repayment plan for some creditors.

If there is no formal spousal support agreement in place but there is a property settlement that essentially acts as one, this debt is probably also not dischargable in bankruptcy. Courts scrutinize divorce agreements and take several criteria into account to decide if a property settlement is acting as a stand-in for alimony. A property settlement involving cash payments for something like home equity or a requirement to repay a spouse for certain debts could be discharged in the bankruptcy if it is not considered a priority debt.

Some people may want to keep these provisions in mind while they are negotiating a divorce agreement and consider whether there are any elements of it the other party is unlikely to pay. For example, a person may want to opt for an agreement for property division that does not involve an ongoing financial relationship, outside of child support and alimony, in case the ex-spouse files for bankruptcy. Parents who are struggling to keep up with child support payments can file for a modification if there has been a change in circumstances.

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