Bankruptcy and Child Support

Child support is money that one parent pays to another to help support their child or children after a separation or divorce. Some of the factors taken into consideration when calculating child support amounts include: the total annual income of each parent; where the child or children will be living; and special expenses for healthcare and extracurricular activities.

If you are experiencing substantial debt issues and having trouble paying child support or alimony (i.e. spousal support) as a result, filing for bankruptcy can help you reorganize your finances and get back on track while still putting your children first.

How Does Bankruptcy Affect Child Support?

Paying: Child support and alimony payments are not eliminated when you file for bankruptcy. If you are behind on payments, bankruptcy or a consumer proposal can reduce payments on debt and other monthly bills so you have more money available for child support and alimony payments.

Receiving: If you are receiving child support or alimony and your former partner files for bankruptcy, you are still entitled to the money owed to you. Talk to the Licensed Insolvency Trustee handling your former partner's bankruptcy about how to submit a claim to become a "preferred creditor".

Can I Reduce or Defer My Child Support Payments?

No. Child support and alimony payments cannot be deferred or suspended even if you have filed for bankruptcy. However, if you and your former partner come to a mutual agreement, you may be able to reduce your payments.

What Can I Do If I'm Behind on Child Support or Alimony Payments?

If you can't keep up with your child support or alimony payments, the best course of action is taking steps to reduce your other unsecured debt. A consumer proposal is a debt repayment plan that allows you to repay a portion of what you owe. Bankruptcy will eliminate your unsecured debts in full for less than a consumer proposal and will make it easier to pay child support and alimony as planned.

Who Can I Talk to About Child Support and Alimony Payments?

If you're unsure how to approach bankruptcy when you have child support and alimony to consider, talking to a professional is the best first step. At MNP LTD, we understand that everyone's circumstances are different, and making sure you understand your options is our top priority. A Licensed Insolvency Trustee will walk you through the process and let you know what to expect no matter what route you decide to take. Start the process today with a free confidential consultation.

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