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Child Support Obligees Must Pay Post-petition Interest
The U.S. Court of Appeals for the Ninth Circuit has ruled that interest on non-dischargeable child support obligations is also not dischargeable, and continues to accrue after a Chapter 13 petition is filed. In so ruling, the court affirmed decisions by the Bankruptcy Court and the U.S. District Court for the Central District of California. Foster v. Bradbury (In re Foster), No. 01-56890 (Feb. 7).
In this particular case, the father's claim was paid in full and his Chapter 13 case closed 2 days before the county sent a wage assignment to his employer, requiring the employer to withhold $100 per month to pay off the $2000 interest that had accrued after the father had filed his original bankruptcy petition. The father filed a motion arguing that the post-petition interest was dischargeable in bankruptcy. The bankruptcy court granted summary judgment in favor of the county and the district court affirmed.
On review, the circuit court likened post-petition interest on non-dischargeable child support obligations in Chapter 13 bankruptcies to non-dischargeable tax debts in Chapter 11 and 12 bankruptcies; according to the court, like the latter, post-petition interest on support obligations may be recovered personally against a debtor who has received a discharge on the underlying debt.
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