Alimony and Child Support Arrears: What Are the Consequences?

In Quebec, child support and spousal support debts are different from regular debts. The amount of support you are required to pay is usually based on your situation and the terms of your support order. Missing support payments can lead to serious financial problems that may last for a long time.

Child support and spousal support debts can’t be erased through insolvency. However, a Licensed Insolvency Trustee (LIT) can help you deal with your other debts and reduce the pressure on your budget. They can explain your options and help you find a solution that works for you.

Key Points

• Unpaid child and spousal support payments can result in garnishment orders targeting your income, bank accounts, and government refunds.
• Bankruptcy and consumer proposals don’t discharge support debts.
• A trustee can help reduce your other debts, making it easier to keep up with your support payments.

What Are the Consequences of Unpaid Child Support?

In Quebec, the Act to facilitate the payment of support applies automatically when a support order is issued. If you do not pay child support, Revenu Québec can take steps to collect the money you owe without going back to court.

Child support is considered a priority debt. This means that Revenu Québec can use stronger collection measures when child support payments are not made.

1. Higher Wage Garnishments

For regular debts, wage garnishment is generally limited to 5% to 30%. However, Revenu Québec can take up to 50% of your net income to collect unpaid child support.

This can also apply to some government benefits and other sources of income, such as employment insurance benefits, CNESST or SAAQ payments, and retirement pensions.

2. Bank Seizures and Interception of Government Payments

Unpaid child or spousal support can lead to money being frozen or seized from your bank accounts, sometimes without notice.

Revenu Québec may also take provincial or federal tax refunds, GST/QST credits, and other government benefits to pay the full amount you owe.

3. Legal Actions and Penalties

When support payments are significantly overdue or are deliberately not paid, the consequences can go beyond financial problems:

• Travel and driving restrictions: The government may refuse to renew or suspend your Canadian passport or driver’s licence.
• Contempt of court: If a court finds that you can pay child support but refuse to do so, you may face serious fines or, in some cases, jail time.

4. Legal Interest

Interest can build up on unpaid support over time, increasing the amount you owe. These debts do not disappear over time and may still be claimed from your estate after your death.

Can Bankruptcy or a Consumer Proposal Erase Support Debts?

If you are having trouble keeping up with your support payments, you may consider debt-relief options with help from a Licensed Insolvency Trustee, such as personal bankruptcy or a consumer proposal.

However, child support and some spousal support debts are treated differently from most other debts in Canada.

Under the Bankruptcy and Insolvency Act, these debts can’t be erased (discharged) through bankruptcy or a consumer proposal. This means that a legal solution will not erase your unpaid support payments. You will also need to continue making your regular support payments.

Can Revenu Québec Continue to Garnish Your Income?

Filing for bankruptcy or a consumer proposal usually puts a stay of proceedings in place. This can temporarily stop many collection actions. However, this protection doesn’t apply to some support-related collection measures.

Revenu Québec can continue to garnish your income or take tax refunds and other amounts to collect eligible child support arrears. This means that bankruptcy or a consumer proposal may help reduce your other debts, but it will not stop the collection of unpaid support amounts.

The Role of a Licensed Insolvency Trustee: How Can They Help You?

Bankruptcy or a consumer proposal can’t eliminate child support debts, but speaking with a trustee can still help. You still need to pay child support, but you may be able to reduce your other debts and have more room in your budget.

Here’s how a trustee can help in your specific situation:

1. Reduce Your Other Debts

In many cases, unpaid child support is part of a larger financial problem. Credit cards, personal loans, lines of credit, and tax debts can accumulate quickly. As more of your income goes toward these debts, it can become harder to keep up with child support payments.

Reducing or eliminating other eligible debts may give you more money in your budget for child support. This can also help you gradually pay down your unpaid support amounts.

2. Establish a Realistic and Prioritized Repayment Plan

A trustee reviews your income, expenses, debts, and financial obligations to get a clear picture of your finances. The trustee can help you understand how your other debts affect your ability to pay the amount of support required under your support agreement. Based upon this review, the trustee can help you adjust your budget and make child support payments a priority.

This can make it easier to keep up with your payments and avoid further collection actions by Revenu Québec.

3. Put an End to Harassment from Other Creditors

Insolvency proceedings can provide legal protection from many other creditors, such as banks, collection agencies, and credit companies. Child support payments must still be made, but collection calls, legal action, and wage garnishments for other eligible debts may stop.

This can help improve your financial stability and give you more room in your budget to keep up with your support payments.

Falling behind on child support can create serious financial stress. While bankruptcy and consumer proposals cannot eliminate child support debts, they may help reduce your other debts and give you more room in your budget.

A Licensed Insolvency Trustee can help you reduce or restructure other unsecured debts. This may free up more money in your budget to meet your family obligations. It’s important to act early, before collection actions by Revenu Québec make your financial situation harder to manage.

Are you struggling to keep up with your child support payments? Contact us for a free, confidential, and no-obligation consultation. Our team will review your situation and help you explore practical solutions tailored to your financial circumstances.