Wednesday, February 10, 2010

Do I have to report my child support as income in my chapter 7 bankruptcy?

Assuming other reasons don't bar filing, presumptive qualification to file chapter 7 bankruptcy is a function of whether you're below the median income in your state of residence. The median income is based on your household size: the more kids you have, the more likely your income may fall short of the median.  (If your income is above median, you may certainly still-qualify for chapter 7; it's just not presumptive. A presumption implies it's sort-of a semi-automatic-thing.)
With children, sometimes comes child support, which is a form of income.  And income is broadly defined in bankruptcy.  In determining your entitlement to debt relief, the Bankruptcy Court and the bankruptcy trustee consider whether you have the means to repay some or all of your debt. Since your child support payment is available for paying bills, it is reasonably counted as income. Income, whether taxable or not, whether above or beneath the figurative table is income. Certain forms of income, such as Social Security Income are regarded differently in the analysis of debt-repayment-ability. 

Ultimately, if you can pay your debts from any source of income, you need to try to. Yet, if you can't pay... federal law provides for bankruptcy debt relief.  We're here to help with that. Don't put up with abusive creditor calls.  Consider: when a creditor commandeers your phone line,  that isn't short of false imprisonment.  And we can break you out of the shackles.
Note that in the context of chapter 13 bankruptcy, there is a "back-out" provision that minimizes the effect of child-support income, in examining the debtors's debt-repayment ability.
San Diego Bankruptcy Attorney, Asaph Abrams. Offering free, no-obligation chapter 7 bankruptcy and chapter 13 bankruptcy consultations in San Diego. Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment. Also representing Imperial County residents. The above is not legal advice and does not address all exceptions, which may be applicable to your case.

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