Filing for Chapter 13 bankruptcy in Georgia can provide much-needed relief for individuals struggling with overwhelming debt. However, when it comes to obligations such as child support and alimony, the rules and treatments can be quite specific and complex. Understanding how these family support obligations are handled in a Chapter 13 case is crucial for anyone considering this form of bankruptcy.

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy, often referred to as a “wage earner’s plan,” allows individuals with a regular income to develop a plan to repay all or part of their debts over a period of three to five years. This type of bankruptcy can help manage debts while protecting assets from liquidation. However, it’s important to note that not all debts are treated equally in a Chapter 13 bankruptcy.

Priority of Child Support and Alimony Payments

In bankruptcy proceedings, certain debts are given priority status, meaning they must be paid before other types of debts. Child support and alimony (also known as domestic support obligations) fall into this category of priority debts. Here’s how they are handled in a Chapter 13 bankruptcy in Georgia:

1. Current Payments Must Be Maintained

First and foremost, filing for Chapter 13 bankruptcy does not eliminate your obligation to pay ongoing child support and alimony. These payments must continue to be made in full and on time throughout the duration of the bankruptcy plan. Failure to maintain these payments can result in the dismissal of your bankruptcy case.

2. Arrears Included in the Repayment Plan

If you have fallen behind on child support or alimony payments (referred to as arrears), these past-due amounts must be included in your Chapter 13 repayment plan. The bankruptcy court requires that all arrears be paid in full over the course of the repayment plan, which can last up to five years.

3. Priority Over Other Debts

Because child support and alimony are considered priority debts, they are paid before other unsecured debts, such as credit card balances and medical bills. Your Chapter 13 plan will allocate funds to cover these domestic support obligations first, ensuring they are brought current by the end of the repayment period.

Impact on Disposable Income Calculation

When creating a Chapter 13 repayment plan, the court considers your disposable income, which is the income remaining after necessary living expenses are paid. Child support and alimony payments are considered necessary expenses. This means they are deducted from your income when calculating how much you can afford to pay toward your other debts under the plan.

Protection from Collection Actions

Filing for Chapter 13 bankruptcy invokes an automatic stay, which temporarily halts most collection actions by creditors. However, this stay does not typically apply to actions for the collection of child support or alimony. Therefore, while the bankruptcy can provide relief from other debts, it will not stop efforts to collect current support payments.

Modifying Support Obligations

If your financial situation has changed significantly, you may be able to seek a modification of your child support or alimony obligations through the family court system. This is separate from the bankruptcy process. It is advisable to consult with a family law attorney to explore this option if you are struggling to meet your support obligations.

Importance of Legal Assistance

Given the complexities involved in handling child support and alimony in a Chapter 13 bankruptcy, it is highly recommended to seek legal assistance. A bankruptcy attorney with experience in Georgia’s bankruptcy laws can help you navigate the process, ensure compliance with all requirements, and develop a feasible repayment plan that addresses your domestic support obligations.

Conclusion

Child support and alimony are critical obligations that are treated with high priority in a Chapter 13 bankruptcy case in Georgia. While Chapter 13 can help manage and repay your debts, it does not eliminate your responsibility to make current support payments or repay arrears in full. Understanding the treatment of these obligations and working with a knowledgeable attorney can help you successfully navigate the bankruptcy process while meeting your family support responsibilities.

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