Court Ordered Payments And Bankruptcy

There are times in which you may be court ordered to pay money to another individual or entity for one reason or another.  These payments are generally not disruptive to a person’s financial  life, unless they end up experiencing a financial hardship. If you have court ordered payments, you may not be able to resolve these debts through bankruptcy.

Domestic Support Payments

Child and spousal support payments are one example of court ordered payments that are not dischargeable in a bankruptcy filing. The nature of support provided by these  payments requires that they must be paid as ordered by the court and cannot be resolved through filing for bankruptcy. Even back due domestic support payments are not eligible for bankruptcy discharge, they must be paid in some fashion. In fact, back due domestic support payments can put you on a fast track for wage garnishment. However, you may be able to secure a payment plan or consolidate domestic support debts.

Criminal Restitution Payments

Criminal restitution payments are payments that are ordered by the court as part of a criminal case sentencing. It requires the convicted defendant to pay the victim of his/her crimes a specified amount of money as part of their punishment. Due to the legality involved in these payments, the courts have set a clear precedence that criminal restitution payments are not eligible for discharge in bankruptcy. The only option for resolving criminal restitution debts is through a Chapter 13 repayment plan  or a payment plan that is arranged outside of bankruptcy and approved by the criminal court.