We often talk about celebrity dads who are behind on their child support or spousal support payments. For many of us, the dollar amounts are mindboggling; how can a famous ex-football player like Warran Sapp owe more than $700,000 in alimony and child support?
It's easy to forget that celebrities have financial ups and downs. Shutting down a tour or having an investment portfolio go south -- think of all the celebrities who lost money in the Madoff scandal -- can send even the most famous and successful star into bankruptcy. As we said in our last post, though, bankruptcy does not clear past, present or future child or spousal support obligations.
In bankruptcy, support payments to children and ex-spouses are considered unsecured debt. Secured debts are things like a home mortgage or a car loan. Unsecured debts are things like credit cards and medical bills. It's easier -- though not infallible -- to think about secured debts as being stuff a bank can repossess. A bank cannot take back medical care or your children to cover what you owe.
Some unsecured debts have priority over others. Generally, alimony and child support payments are high-priority debts. So, a man's child support payments will be at the top of the list in a Chapter 7 bankruptcy and must be included in a Chapter 13 repayment plan.
This is not meant to be a thorough review of the bankruptcy law and child support or spousal maintenance. The relationship between bankruptcy and family law is complicated, and it can vary from state to state. If you are considering bankruptcy, it's wisest to consult with a family law professional -- as Sapp has surely done -- before making any decisions. If your ex is considering bankruptcy, talk to a family law professional about your rights.
SunTimes.com, "Warren Sapp files for bankruptcy; assets include 240 pairs of Jordans," Associated Press, April 9, 2012
FindLaw.com, "Child Support and Bankruptcy," accessed April 9, 2012