The most important amendment is found in section 214 which removes several significant collection remedies from the effect of the automatic stay. Of these, the most valuable by far, is a provision allowing the continued operation of an earnings withholding order as defined in the Social Security Act. Under current bankruptcy law the reverse is true. The support creditor is often forced to take a back seat to other ordinary creditors when a support arrearage is paid pursuant to a bankruptcy plan. The importance of this amendment cannot be underestimated.
Federal law requires all support to be paid by employees through wage withholding orders.
Under current bankruptcy law, when a debtor files for protection under Chapters 12 or 13, the collection of even ongoing support is stayed. The economic detriment to a debtor s family, which is not receiving public assistance, can be devastating. Surely sound public policy must recognize that there are some obligations which must be met, even when a debtor should be relieved from obligations to general debtors. Of these, none can be greater than the payment of support needed for the health and welfare of the debtor s family. All too often a domestic court may reduce the current support order to accommodate the payment of arrears.