Questions: I am recently divorced with children. I have given my wife the house and healthy support payments so that my children can live comfortably and without too much disruption to their lives. My wife was stay at home before so I transferred debts to my name in the form of unsecured lines of credit. I have a good income and a good company pension but my employer has recently refused to pay me a substantial amount of money which I earned through a contract with them. This missing money has left me in a serious shortfall. I am considering personal bankruptcy to shed the dept load. My questions are: Will the courts demand a big chunk of my good income and will this impact my support payments or are the support payments protected? What happens to my company pension?
Answers: There are a number of complexities in your situation, so you should consult a bankruptcy trustee to review your unique situation.
In general, a company pension is not impacted by a bankruptcy.
As for your income, while you are bankrupt you are required to make a contribution to your bankruptcy estate based on your income. It’s called a surplus income payment, and the more you earn, the more you pay while bankrupt. However, the child support you pay is considered a reduction in your net income, so your child support payments reduce your surplus income in a bankruptcy.