How Does Filing Bankruptcy In Las Vegas Impact My Child Support?
And Can Child Support Be Discharged Through Bankruptcy?
Making the decision to file for bankruptcy in Las Vegas, Nevada is no small choice. One of the biggest factors in your decision may be how your child support will be impacted by the process. It will be key that your Chapter 7 or Chapter 13 bankruptcy is filed fully and accurately so that you can have the best possible financial situation moving forward. Whether you pay or receive child support, make sure that your Nevada bankruptcy is planned strategically. Our Las Vegas bankruptcy team will handle the details of your case, so you can focus on your family relationships and rebuilding your credit history. Get started off on the right foot with your confidential free case evaluation. You should call or use our online form today.
Las Vegas Child Support
Most states have limits for child support that equate to quite a considerable portion of your income. Nevada is not the exception. If you have another dependent, such as a stay-at-home spouse or minor child, the maximum amount that your wages can be garnished for another child is 50 percent. If you have no other dependents, the maximum increases to 60 percent. Falling behind more than 12 weeks on payments will add another 5 percent to your maximum. If a work contract falls through or you end up temporarily unemployed, you could quickly rack up quite a balance of child support in arrears. Filing bankruptcy does nothing to change the amount of child support you owe each month. If you need to reduce the amount of child support you pay each month, this needs to be done through a child support modification, which is a family law procedure.
What Type Of Debt Is Back Child Support?
Back child support is unsecured debt. Many unsecured debts, like credit cards and medical bills, are wiped away fairly simply in either bankruptcy chapter. But some unsecured debts aren’t treated so lightly in bankruptcy. Some unsecured debts are priority debts, making them exempt from some or all of the bankruptcy process. Child support is an unsecured priority debt, so it can’t be discharged by bankruptcy. Other common examples of unsecured priority debts include recent tax debts and student loan debts. These debts remain after a Chapter 7 discharge, and will be prioritized higher than other unsecured debts in a Chapter 13 payment plan.
What Happens To My Child Support Wage Garnishment After I File Bankruptcy In Nevada?
The biggest incentive for many people seeking to file bankruptcy is stopping a wage garnishment. Once a bankruptcy petition is filed, it triggers a legal protection called the automatic stay. The automatic stay protects the debtor from wage garnishments as well as repossessions, utility shutoffs, and more. However, child support is an exception to the automatic stay’s power to stop wage garnishments. If you file Chapter 7 bankruptcy, your child support wage garnishment will not stop. Plus, if you file Chapter 13 bankruptcy, your child support wage garnishment will only stop if your payment plan, as structured, will pay off all of your back child support. Therefore, if it does not, your child support wage garnishment will continue in addition to your Chapter 13 payment plan.
Child Support & The Las Vegas Means Test
The Means Test may be a crucial part of your bankruptcy filing, whether you declare Chapter 7 or Chapter 13. The Means Test is used to determine your disposable monthly income, or how much income you have left over after your monthly expenses that could be used to repay your debts. Child support is one of the expenses you can use while calculating your Means Test, which can have a significant impact in your case.
When you file Chapter 7 bankruptcy, the standard way to show that you qualify based on income is by comparing your household income to the state median household income. The median household monthly income for a household of one is $4,532.83. For a family of two, it is $5,817, and for a family of three, it is $6,461.33. This continues to increase in similar increments for each additional dependent family member (under the age of 18) you add. If your income is too high to qualify through this method, you will use the Means Test. If your Means Test calculation is negative or within a certain range for Las Vegas, you will still be eligible to discharge debts with Chapter 7 bankruptcy. So if you need to use the Means Test to qualify for Chapter 7 bankruptcy, make sure you don’t forget to include your child support expenses when determining your disposable monthly income.
The Means Test is also an integral part of creating your Chapter 13 payment plan. Your debts will be sorted into bankruptcy legal and attorney’s fees, secured debts, priority debts, and unsecured non-priority debts, and paid in that order. Your payment plan will last either 3 or 5 years and be based on your disposable monthly income. Debts in the fourth category, or unsecured non-priority debts, may be discharged at the end of a Chapter 13 payment plan if the debtor doesn’t have sufficient disposable monthly income to pay them in the plan. So if you forget to include your child support expenses in your Chapter 13 bankruptcy, your monthly payments could be much higher, and you may have to pay more of your unsecured non-priority debts. Contact our Las Vegas bankruptcy team for more information about filing Chapter 13 with child support as a consideration.
I Receive Child Support Payments: Can I Still Declare Bankruptcy?
If you receive child support payments, you may be concerned about whether you are eligible to declare bankruptcy in the first place. The good news is that child support is largely exempt from the bankruptcy process. The bankruptcy court doesn’t have an interest in interfering with your child’s financial support. Just like bankruptcy won’t stop a child support wage garnishment, the fact that you receive child support won’t be used as a disadvantage against you in your bankruptcy case. It doesn’t count as income for qualification purposes, and the trustee can’t take it from your bank account, like other non-exempt funds, to pay your creditors. Your Nevada bankruptcy filing does nothing to affect your ex’s obligation to financially support your children.
Contact Experienced Law Team To Get Your Bankruptcy Done Right
While it may not seem sensible to incur the expense of a bankruptcy attorney, you will quickly see how much time, stress, and potentially money, it will save you in the long run. Your bankruptcy attorney will make sure that you are qualified correctly for the chapter you file, and that exemptions are applied to protect all of your property. We will represent you at your 341 Hearings and throughout all other bankruptcy-related issues with your trustee and creditors. The fact of the matter is, bankruptcy cases filed with experienced bankruptcy attorneys have much higher success rates than cases filed by self-represented debtors. Our experienced Vegas bankruptcy law team will make sure your case goes smoothly with pricing plans that you can afford. Learn more about our top tier legal services and competitive payment plans by calling or using our online form to schedule your free consultation today.
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