Wednesday, February 24, 2010

If my ex-spouse files for Bankruptcy, can they discharge support they owe?

Under the current Bankruptcy Code, a debtor who files a Chapter 7 bankruptcy will not receive a discharge from debts defined in paragraph 5 of 11 U.S.C. § 523(a) as "domestic support obligations" or debts under 11 U.S.C. § 523(a)(15) owed "to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit."

"Domestic support obligations" are defined by 11 U.S.C. § 101(14A) as debts "in the nature of alimony, maintenance, or support" owed to a spouse, former spouse, or child.

These limitations on dischargability therefore apply to both child support and alimony, as well as other potential obligations under a divorce decree, such as agreements to pay joint debts or obligation to pay an ex-spouses attorney fees.

If your ex-spouse does file for bankruptcy, you may need to file responsive pleadings and argue this issue in front of a Judge if the debtor seeks to discharge the debt. If you fail to dispute the discharge, that could result in the debt being discharged. Though this is very unlikely, if you are not sure how to protect your rights you should consult with an attorney.

8 comments:

  1. But can a spouse have their obligation to pay the house mortgage eliminated by filing bankruptcy and then make the other spouse lose her interest in the house because of it?

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  2. In response to the questions posed anonymously in the first comment, the answer is that "it depends." If the spouse's obligation to pay the house mortgage was pursuant to a court order (such as a Divorce Judgment), it is possible this would be considered a domestic support obligation in some circumstances. For instance if it was to allow the children or the other spouse to continue to live in the house, then it could be considered a domestic support obligation.

    Just because their is no longer an obligation by one spouse to pay the mortgage company directly, does not mean their obligation to the other spouse is discharged. It would depend on the language of the divorce judgment and the situation relating to the house. If any readers find themselves in this position I suggest they speak to an attorney regarding the specific facts of their case.

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  3. Hypothetical: During marriage wife files CH. 7, (the husband is unable to due to a transfer issue statute), and the CH.7 discharge is granted for the filing spouse; two years later they file for divorce, the husband then files for CH. 7, is wife entitled to community property division claim of the husband's retirement, if husband was the only one to hold title of the retirement, and wife never listed it as an asset or community property asset?

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  4. Justin L. Kelsey, Esq.February 26, 2010 at 11:00 PM

    In response to the questions posed anonymously in the third comment: We practice primarily in Massachusetts, which is not a community property state. However, in Massachusetts property owned by either spouse may be divided in a divorce regardless of titled ownership, in what's called "equitable division" pursuant to M.G.L. c. 208 Section 34.

    So retirement accounts can be divided, and often are, depending on the other circumstances surrounding the remainder of the finances. The Wife's failure to list the retirement as an asset in her Chapter 7 petition would not affect this division in a Massachusetts divorce court because she would have no obligation to disclose an asset to the bankruptcy court which she did not have a titled interest in during the marriage. If any readers find themselves in this position I suggest they speak to an attorney regarding the specific facts of their case and the specific laws of their jurisdiction, especially any local laws relating to community property.

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  5. If it is in our separation agreement and incorporated in our divorce decree that my ex spouse pay credit debts and then he files Chapter 7 Bankruptcy, one can he be discharged from those bills. Two, is it still too late for me to file an adversary complaint after the 60 days from the meeting of debtors and if so can I take him back to the court and file a show cause for nonpayment of debts even if he successfully was discharged from those bills in bankruptcy court?

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  6. Anonymous:

    Thank you for your question. The answer to your question, generally speaking, is that you may have some remedies available either in the bankruptcy court, or, more likely, the family court in your jurisdiction. However, in order to fully answer your question, I would need to know additional details, such as the whether the debts were in your former spouse's name and yours, the terms of the separation agreement, the procedural status of the bankruptcy and some other additional information. I would suggest contacting either a family law attorney or bankruptcy attorney in your area. If you are in Massachusetts, please feel free to contact my office at 508.655.5980. Best of luck.

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  7. I want to dispute my ex husbands bankruptcy filing. He is not being truthful about living with his girlfriend, he inflated his rent, did not disclose a third car, did not disclose a very large retirement he will have access to in three years. I don't want to hire an attorney. Can I not dispute this on my own?

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    Replies
    1. You may represent yourself in bankruptcy court. Just be aware that the bankruptcy court requires electronic filing which will require you to go to the courthouse and scan your filings directly into the system if you do not have access to the ECF system. Also I feel compelled to provide the following proverb:

      ...observed the eminent lawyer, "I hestitate not to pronounce, that every man who is his own lawyer, has a fool for a client." - by Henry Kett, 1814:

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