Does Bankruptcy Wipe Out Child Support Arrears in Ontario?

If you owe child support arrears and are buried in other debt, bankruptcy can look like a clean slate. Many people are surprised to learn that support debts are treated differently from credit cards, loans and most other unsecured debts.

This article explains in plain language what the Bankruptcy and Insolvency Act says about support, why arrears generally stay with you, and what you can do instead. It is general information, not advice on your situation. A licensed insolvency professional and a family lawyer can look at your actual numbers and orders.

The short answer: support arrears survive a discharge

A discharge from bankruptcy normally releases you from claims that can be proved in the bankruptcy, subject to listed exceptions. Support debts are among those exceptions.

Section 178(1)(b) of the Bankruptcy and Insolvency Act says a discharge does not release a debt or liability for alimony or alimentary pension. Section 178(1)(c) also keeps support debts in place, including debts under a court decision on affiliation or support, and debts under a maintenance agreement for a spouse, former spouse, former common-law partner or child living apart from the bankrupt. In practical terms, child support arrears survive a bankruptcy discharge.

How support debt compares with other debts

The table below shows the general pattern. Whether a particular debt is released always depends on its details, so confirm with a licensed insolvency professional.

What bankruptcy does not change about your support order

Filing for bankruptcy does not reduce the amount you are ordered to pay. Only a court can change the amount of support, and the Family Responsibility Office (FRO) says it cannot change what a payor pays. You are also told to keep paying until FRO says in writing that you can stop.

You may also hear about consumer proposals as an alternative to bankruptcy. How a proposal treats support debts depends on the law and the terms involved, which is a question for a licensed insolvency professional rather than something to assume.

Options if you cannot keep up with payments

Missed support is called arrears. If you are behind or about to be, the payor should contact FRO right away, and FRO says a voluntary arrears payment schedule can be worked out.

If your income has genuinely changed, the route to a different amount is a court variation. The Divorce Act lets a court vary, rescind or suspend a support order. Before it varies a child support order, the court must be satisfied that a change of circumstances as provided for in the applicable guidelines has occurred. A change in circumstances that would result in a different child support order is one that allows variation.

• Bankruptcy is not a way to erase arrears or lower ongoing support.
• A voluntary payment schedule can be arranged through FRO.
• A court application is how the amount of support is changed.
• A drop in income that you caused may need to be explained to the court; one court upheld using a payor's earlier three-year average income where he had not adequately explained leaving a much more lucrative arrangement.

What to do next

• Gather your support order or agreement, your FRO statement and a list of what you owe in arrears.
• Contact FRO promptly rather than waiting for the arrears to grow.
• Keep paying what the order requires until FRO confirms in writing that you can stop.
• Speak with a licensed insolvency professional about how your other debts would be treated.
• Talk to a family lawyer about whether your income change supports a court variation.

Frequently asked questions