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1800-DeadbeatIf the obligor files for bankruptcy, you can no longer pursue child support collection until you go to court to apply for a "relief from the "stay".
A person, or a company, can file for bankruptcy to either have all of his/her debts discharged (eliminated), or to have a "stay" from the collection procedures until the debts can be slowly paid off over time. Child support can not ever be discharged, but it can be paid off at a slower pace. If your obligor has filed for bankruptcy, it will be handled in one of the following ways:
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Chapter 7: Is the bankruptcy type where all of the debts are discharged. The obligor starts off with a clear slate with no debts. Child support is an undischargeable debt. Seek immediate relief from the bankruptcy court by using the following motion.
Chapter 11: Is mostly for businesses that are in over their heads. They can propose a reorganization to the bankruptcy judge where they outline how their debts will be paid off. If the judge says it's okay, they then go into a Chapter 11. If the judge does not accept their proposal, then the bankruptcy becomes a Chapter 7.
Chapter 13: Is similar to the Chapter 11, but it is for individuals. It works the same way in that the individual filing for a bankruptcy must outline show all outstanding debts will be paid. If accepted the individual can keep his/her personal property, if not, it is liquidated.
To file a relief from a stay it will cost about $70 and it can be filed at the clerks' office. remember to serve a copy to the obligor, his/her attorney, if there is one, and the trustee. The notice that you receive informing you of the obligor's upcoming bankruptcy proceeding will provide you with the names and addresses of the people that you need to serve.
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