Can you go bankrupt if you just owe child support arrears?
It’s very important that your child receives the best in life. This is why, if you used the CMS (Child Maintenance Service) to set up your child maintenance arrangement, the courts will dictate how much they are to receive in child support. However, sometimes life can affect your ability to stay on top of these payments.
Therefore, if you have found yourself unable to make the minimum repayments on debts and have exhausted all other debt solutions, you may be considering going bankrupt. This is a serious decision that cannot be taken lightly but is the best option for those with nowhere else to turn. However, you may be wondering if you can still go bankrupt for child support arrears.
Can you go bankrupt if you owe child support?
Yes, you can, but you cannot include your child support debt within the bankruptcy. You are still legally liable for the debt and so will need to continue making payments. However, in some cases, the CSA (Child Support Agency) or CMS may agree to remove the debt if you explain your situation. This is, of course, not guaranteed.
What if you have a family-based arrangement?
You can still go bankrupt but, again, this debt cannot be included because it is not a legally binding agreement. However, if you do stop paying what you agreed to your ex-partner they can get the CMS involved and it can take enforcement action against you.
How bankruptcy could affect your ability to repay child support
Bankruptcy impacts your finances and, in most cases, your bank account will be frozen or closed once the bankruptcy order is set up. This means you may need to change how you make your child maintenance payments. You may have paid by direct debit before but now you will need to notify your partner and the CSA or CSM – if the arrangement was set up through them – that this is how you are now making payments.
Alternatives to bankruptcy
If you haven’t yet looked into alternative options to bankruptcy, now might be a good time. There is a wide range of debt solutions available that can help you clear your debts and that won’t have as big an impact as bankruptcy does on your everyday life.
These include other insolvency solutions such as a debt relief order (DRO) which may be best for those who do not own their own home but still want to remove their debts within a 12 month period, if you meet the other entry criteria. An IVA (individual voluntary arrangement) is another option to consider.
This solution sets up a manageable monthly repayment plan based on your income and expenses that you pay over a course of often five years. At the end of this period, you may be asked to remortgage your home to release its equity – which is then put towards your debts.
If you are behind on child support payments, it’s important you look into getting this under control. We can help, with a range of debt solutions available that can help you manage your repayments. Get in touch with a member of our team at PayPlan on 0800 280 2816for more information.