Discharge of Support Arrears in Chapter 7 Bankruptcy in California

Child Support Rules

Even if you are disabled or unemployed, you cannot reduce or eliminate your child support commitments in any type of California bankruptcy. If you cannot pay your familial support due to an unavoidable change in your health or financial situation, you must contact the family court that handled your case. A family court judge will then decide whether or not he will reduce your child support obligations. If you simply stop paying child support, you can lose your driving privileges and in some cases be arrested.

You also cannot use the California bankruptcy court system to eliminate your alimony obligations, court fines or debts related to crimes such as drunken driving, warns the book “How to File for Chapter 7 Bankruptcy.” A bankruptcy judge will not eliminate your responsibilities to pay local, state or federal tax bills unless the debts were incurred at least three years before you filed Chapter 7. The eligibility date begins with the date you filed the tax returns rather than the tax year.

Generally, you must earn less than California’s annual median income level to successfully declare Chapter 7. As of 2011, the annual median income figure for a single Golden State resident was $48,009, while the level for a family of four was $78,869, according to the U.S. Trustee Program. Couples could earn up to $62,970 per year and still file Chapter 7. If you earn more money, you must complete a federal means testing formula to prove you cannot partially repay your creditors and support your family. Otherwise, you must partially repay debts under Chapter 13 or not file bankruptcy.

You can invoke state asset exemption laws to protect some of your property if you have lived in California for at least two years, according to Bankruptcy Action. As of 2011, you could keep up to $75,000 in personal property if you are single and not disabled. People over 55 could retain $100,000 in personal property, while disabled residents or those older than 65 could keep up to $150,000 in assets.