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socrateaser
socrateaser, Lawyer
Category: Family Law
Satisfied Customers: 38241
Experience:  Retired (mostly)
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I am self employed and recently filed a chapter 13. It can

Customer Question

I am self employed and recently filed a chapter 13. It can be argued that these debts are reasonable and necessary for the production of my income. Can these payments be deducted from my net child support income calculation?
Submitted: 1 year ago.
Category: Family Law
Expert:  socrateaser replied 1 year ago.
Hello,
The bankruptcy code expressly deems child support as a nondischargeable debt. Bankr. Code § 523(a)(5). In practice, this provides state family court judges with effectively unlimited discretion as to the determination of whether or not a particular business expense may be deemed ordinary and necessary for the production of income, as would be the case under Int. Rev. Code § 162.
Simply put, the fact that an expense is a reasonable expense under federal bankruptcy or tax law, may be useful evidence in family court. However, the final judgment on any particular expense is entirely within the discretion of the family court judge.
The typical example is a leased luxury vehicle used by a real estate agent. The vehicle may be ordinary and necessary to the agent's production of income, but the family court can determine that the agent uses the vehicle for personal use, and that the agent could use a C300 Mercedes, just as well as a CLS550 -- consequently, half of the lease payment shall be deemed disposable income for the purposes of calculating child support. And, as soon as the current lease expires, the court will expect the agent will lease a less costly vehicle, in order to maximize child support payments.
Note: I personally find child support laws to be astoundingly inequitable in general. However, they "is what they is," and it is extremely difficult to win these battles in court. Consequently, a child support obligor must be prepared to "downsize" their lifestyle.
I realize that my answer may not be exactly what you were hoping to read. However, under the circumstances, the best that I can do is to explain what the law is and is not, so that you can avoid expending valuable resources looking for answers that do not exist, and concentrate on the options that are actually available.
I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.
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