Bankruptcy & Child Support in California

Many people in California who experience divorce while also experiencing financial hardship may wonder how child support affects bankruptcy and vice versa. Child support refers to court-ordered payments made by one parent to the other to assist that parent with the child’s living expenses, while bankruptcy is a way to help someone clear certain debts and start over financially. Here are some things to know about how bankruptcy affects child support in California.

What Child Support Means for Parents

Courts generally act in the best interest of the child during a divorce, which means ensuring that the custodial parent has enough money to cover the needs of a child. While every situation is different, certain guidelines generally apply across the board when it comes to child support.

What Child Support Covers

Child support is financial support paid to help cover the child’s needs. It can cover things such as clothing, housing, education, and other daily needs for the child. Child support payments are meant to be for the child, and parents using payments to supplement things of their own may be subject to further investigation.

There are some things that child support may not cover in California. These things include:

• The cost of private school and tutoring 
• Expenses related to going to college or university once the dependent turns 18 or graduates from high school 
• The cost of recreational activities, unless deemed necessary and in the best interest of the child by the custodial parent

The expenses that child support covers largely depend on the situation. However, the goal is to cover the basic necessities and maintain a similar standard of living to what the child was used to.

Who Pays Child Support to Whom

Typically, the parent who does not have custody of the child in question is the one who pays child support to the other parent. This is because the parent with custody is the one who pays for most of the child’s essentials. Keep in mind that there are other factors that determine how much a parent contributes, such as:

• The gross income of both parents
• How much time each parent spends with the child on average 
• The cost of childcare 

It can get a little more complicated when it comes to dispersing child support to parents who have joint custody of the child. In those cases, it may come down to the factors listed above as well as which parent the child spends the most time with, despite being in a joint custody agreement.

What Filing for Bankruptcy Entails

Bankruptcy often has a negative connotation, but it is a way for people to start over financially and gain more control over their finances and mental health. Two of the most common types of bankruptcy are Chapter 7 and Chapter 13. Choosing the one that is best is highly dependent on the needs of the individual or family. For example, filing for Chapter 7 bankruptcy often results in a quick turnaround until the filer gets relief, while Chapter 13 generally requires the filer to wait as long as 5 years after the filing date until they begin their journey to financial recovery.

Does Bankruptcy Affect Child Support?

While bankruptcy can clear some debts and payments, child support is not one that filers can avoid by declaring bankruptcy. The reason for this stems from the courts wanting to do things in the best interest of the child. In general, this means that wages and other interest declared by the parent should first go to the child once a reasonable minimum is taken out for the parent to cover their own expenses.

Keep in mind that the type of bankruptcy that a person files can have a lot to do with how the courts collect child support. For example, those who file for Chapter 7 may expect to see the liquidation of their assets upon nonpayment, with child support being one of the first things that the proceeds go towards. Meanwhile, people who file for Chapter 13 may have the option of creating a plan to compensate for child support payments missed previously.

Sometimes, people need to file for bankruptcy while also going through a divorce that involves child support negotiations. It is important to choose which chapter of bankruptcy is best for them while considering how it will affect child support payments now and in the future.

Learning More About Bankruptcy and Child Support

Most parents want to do the responsible thing and help support their children. However, financial circumstances can sometimes make that difficult. If you need to know more about how a bankruptcy will affect your child support situation then contact us today to get a free initial consultation.