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Chapter 13 Bankruptcy

A chapter 13 case is filed by the debtor and is available to any individual with regular income and has debt within certain limits. This type of bankruptcy is referred to as the “wage earner’s plan.”

Chapter 13 provides the debtor a means of getting caught up on their obligations without having to go through a complete liquidation of property.  Under Chapter 13, the court approves a plan by which the debtor makes regular payments to the Chapter 13 Trustee, who in turn, distributes payments to the creditors.  Child support is a priority debt.

The plan typically lasts three to five years.  Just as in Chapter 7 cases, the debtor must file a Petition for Bankruptcy, Schedules and the Statement of Financial Affairs.  The debtor must file a Proposed Chapter 13 Plan within 15 days of the petition filing date.

During the time the NCP is in bankruptcy the following processes remain in place:

  • IWO for current support, spousal support, if applicable
  • Federal and State tax offset collections
  • Credit Bureau Referral
  • Passport Denial

Judgment payments are normally paid through the Plan and any existing IWOs which include judgment payments need to be amended to include current (and spousal) support only.

Useful screens:

The Bankruptcy Court screen displays a list of bankruptcy courts for a given state. The Bankruptcy Court information is used to updates ASUP.
Allows for a client search using the last four digits of the social security number and the option of entering up to eight letters of the last name.

Required Process and OSIS updates:

Step 1:
Update ASUP screen with Chapter 13 information and date filed
Step 2:
Consult CSS attorney regarding possible stay order
Step 3:
If there are arrears, CSS must file Proof of Claim with the Court within 180 days after the date of the Order for Relief. CSS recommends the Proof of Claim be filed as soon as possible.  (Consult a CSS Attorney for this process, most Bankruptcy Courts require electronic filing)
Step 4:
Obtain and review Chapter 13 plan to determine if all or part (only arrears?) of child support is to be paid through the plan or outside the plan
Step 5:
Update obligations as necessary to ensure arrears paid through a confirmed chapter 13 plan is not collected otherwise than allowed in the plan
Step 6:
Document all actions on caselog

After Discharge or Dismissal received:

Step 1:
Update ASUP screen with discharge/dismissal date
Step 2:
Review any previously modified obligations and revise to accommodate for payments made in compliance with the Chapter 13 plan
Step 3:
Document all actions on caselog

For assistance, email:

Legal Authority:

United States Code:

  • 11 USC §§ 101‐1501 Bankruptcy Code
  • 11 USC §362(b) – Automatic Stay (exceptions)
  • 11 USC §501 – Filing Proofs of Claims or Interests
  • 11 USC §507(a)(1)(A) – Priorities
  • 11 USC §1327 – Effect of Confirmation
  • 42 USC §654. State plan for child and spousal support
  • 42 USC §656 Support Obligation as Obligation to State; Amount; Discharge in Bankruptcy

Code of Federal Regulations:

  • 45 CFR §303.2   Establishment of cases and maintenance of case records.
  • 45 CFR §303.3   Location of noncustodial parents in IV-D cases.
  • 45 CFR §307.10   Functional requirements for computerized support enforcement systems in operation by October 1, 1997.

Oklahoma State Law:

31 O.S. § 1 Property Exempt from Attachment, Execution or Other Forced Sale‐Bankruptcy Proceedings

Oklahoma Administrative Code:

OAC 340:25-5-200. Scope and applicability