Child Support and Bankruptcy
We know that considering bankruptcy can be a difficult and emotional decision. What’s more, we also understand the added stress that comes with not being certain if you can make your child support or alimony payments.
Fortunately, there are solutions available to ensure you can maintain this support and we’ve outlined important facts about how bankruptcy, or a consumer proposal, impacts your child support or alimony payments.
Is there a way to reduce my child support/alimony payments or defer them temporarily?
No. Child support and alimony payments must be made. If you are considering filing for bankruptcy and you have to pay child support or alimony, you will still have to make these payments, even after the bankruptcy process is complete. You will not be released from these obligations during a bankruptcy filing. As well, these payments cannot be deferred or suspended.
However, if you are behind on your payments, you may be able to reduce the amount of payments made on your other monthly bills and debt payments, so that you have more money to put towards your support or alimony payments.
What can I do if I am behind on my child support/alimony payments?
There are a few steps you can take to either reduce or eliminate your unsecured debts:
- You can create an affordable debt repayment plan, designed for your financial situation, through filing a consumer proposal. This is a formal proposal made to your creditors and you usually repay only a portion of the unsecured debt you owe, instead of the full amount. Learn more about how this option can help you take back control of your support payments and overall debt by visiting our Consumer Proposals page.
- If you determine that you can’t afford to repay any of your debts, filing for bankruptcy could be an alternative. All your unsecured debts will be eliminated and that can make it easier for you to make your alimony or child support payments. Visit our Bankruptcy page for more details about the process and its impact on unsecured debt.
What should I know if I am the one receiving support payments?
If you are receiving child support or alimony payments and your former spouse’s payments are outstanding and he/she files for bankruptcy, you may submit a claim for the money owed to you, and make yourself a “preferred creditor.” Talk to the Licensed Insolvency Trustee (LIT) handling your ex-spouse’s bankruptcy filing about what it means to be a preferred creditor and what you need to do to become one.
Who can I speak to about how bankruptcy affects my child support/alimony payments?
You can speak to one of our local debt professionals about your options for reducing or eliminating your unsecured debt. Before considering bankruptcy, our LITs will review your situation with you and go over every method of debt control available to find the best solution to your case. You may request a call today for a free, no-obligation assessment.