“D” in the Bankruptcy Alphabet is for “Domestic Support Obligation”

By Christopher C. Carr, Esq., Chester County Bankruptcy Lawyer

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

omestic support obligations (a “DSO”) include bankruptcy, child support and spousal support.  Domestic support obligations cannot be discharged or modified in either a Chapter 7 or Chapter 13 bankruptcy, pursuant to 11 USC. 523(a)(5). The impact a bankruptcy will have on support payments differs as between a Chapter 7 or a Chapter 13. A Chapter 7 has no effect on the support payments and will not stop the collection, enforcement, or payment of support. Indeed, there is no automatic stay against the enforcement and collection of DSO’s unlike other debts under a Chapter 7. However, because the debtor’s future wages are property of the bankruptcy estate, a Chapter 13 is different. This feature allows the use of a Chapter 13 to catch up on DSO arrears (back support). That is, in a Chapter 13 the debtor’s attorney presents the Trustee in bankruptcy, who represents the creditors, with a plan as to how all of the creditors will be treated. That plan will include how the payment of child or spousal support will be done. DSO’s will have a higher priority for payment than other unsecured debts as DSO’s are classified as priority unsecured debts under the Bankruptcy Code. DSO’s are paid first before other unsecured debt like Visa or Master Card debt.

One of the unfortunate ironies of our country is that while Article 1, Section 8, Clause 4 of our Constitution governing bankruptcies was enacted against the backdrop of the manifold evils of the debtor’s prisons then in operation throughout Europe, today local courts using their civil contempt powers are permitted to imprison those of its unfortunate citizens who cannot pay their DSO’s. These are not “deadbeat dads” but ordinary hardworking people who wish to but simply cannot pay often because of circumstances beyond their control. High joblessness, slow wage growth, underemployment and plummeting home values are pushing more and more Americans deeper into debt in many cases making it impossible for them to do so. Serious illness may also strike, incapacitating the debtor. However, much like the inmates of the debtor’s prisons of yore, these individuals are unable to work while imprisoned and face great difficulty or impossibility in resuming their prior employment once released. Thus, paradoxically these draconian measures do little or nothing to foster the payment of DSO obligations and have minimal deterrent effect because these personal situations are for the most part unavoidable. Perhaps only slightly less self-defeating, many states such as Pennsylvania also authorize the suspension of driver’s licenses and/or professional or occupational licenses after a short period of DSO nonpayment. A Chapter 7 filing is useless against the collection, enforcement, or payment of DSO’s as there is no automatic stay of DSO’s. However, in contrast, a Chapter 13 proceeding can actually work to protect the debtor against DSO enforcement actions, including wage and tax return intercepts, and arrest or imprisonment, because all property acquired by the debtor is property of the bankruptcy estate. Thus, all actions to collect or enforce DSO’s will usually be halted by the filing of a Chapter 13 bankruptcy. Support payments may be temporarily stopped until the plan payment details are worked out as well. Once the plan is confirmed, DSO creditors are bound by it and the enforcement actions discussed above are impermissible under Section 362 (b) (2) (B) of the Code at least so long as the debtor continues to make DSO payments under the Chapter 13 plan. However, once the plan is confirmed, should the debtor fail to pay any post filing support payments, the debtor’s case may be dismissed or converted to a Chapter 7. See 11 USC 1307(c)(11).

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.

©Christopher C. Carr, Attorney at Law, 2011, 2012, All Rights Reserved

Other attorneys playing the bankruptcy alphabet game:

D is for Deconsolidate

D is for Debtor

D is for Discharge

D is for Disclosures

D is for Documents

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality Chester County Bankruptcy Practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Carr, who has over 30 years if diversified experience as an attorney, concentrates his practice on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!

I also provide Mortgage Mod Services.

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