Here is how to paint the scenario: A women you had sexual relations with is claiming that you're the father of her newborn child and petitioning for child support. At the same time, you're facing financial difficulties and filing for bankruptcy. Although this situation may seem unique, there might be a few times when it does happen. Here are the three basics of what you need to know.
Paternity Testing Is Exempt from Automatic Stays
When you file for bankruptcy, you are entitled to an automatic stay. This means that all creditors are prohibited from taking action against you until you have finalized your application. For example, this means that your credit card creditors can no longer call you throughout the day demanding repayment.
While an automatic stay can be very useful and can give you some time to work your finances out, it doesn't stop all creditors from taking action. Your baby mama still has the right to file a lawsuit to establish paternity. In the event that you are the father, you will be responsible for paying child support.
Child Support Always Get Paid First and in Full
In the event that you're required to pay child support, keep in mind that you cannot be excused from making child support payments even if your bankruptcy application is approved, and you're still responsible for paying back payments in full. This is because child support payments are considered to be priority debts. You are responsible for fulfilling these payments first.
Child Support Payments Are Considered to be Expenses
When determining whether you are eligible to file for bankruptcy, the courts will take into consideration your income and your expenses to determine whether you have any disposable income. If you don't have high enough expenses, you might want to wait until you are required to pay child support before filing for bankruptcy. This is because child support payments are considered mandatory expenses and can really impact your income to expense ratio.
Depending on where you're at in determining paternity or coming to an agreement on what reasonable child support payments look like, you may or may not want to file for bankruptcy just yet. It's important to determine how mandatory child support payments will affect your financial situation. Speak to a bankruptcy lawyer like Geranios Law PLLC to determine what may be the best route to take in your situation.