Can’t touch this! Child and spousal support…
A child or spousal support debt can be a huge burden, especially if arrears have accumulated over a long period of time. In the context of bankruptcy or a consumer proposal, child support debt is treated in a special way: firstly, it is not dischargeable, meaning it will survive the process.
Next, it may be partially prioritized, which can allow the person you owe the money to receive payments a bit more quickly than other creditors through the bankruptcy or proposal.
Finally, the normal stay of proceedings of the Bankruptcy and Insolvency Act does not apply, which means you must continue to pay the regular amounts due and you can still face wage garnishment during the process.
However, using the Bankruptcy and Insolvency Act as a solution to your other “normal” debts can help free up your budget to meet your child support obligation and catch up on arrears.
A licensed insolvency trustee at Beaudin Groupe Conseil will assess whether a bankruptcy or a consumer proposal is the best solution for you and how this solution could help you get back on top of your child support debt.