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Can I Get Rid of Child Support, Alimony or Property Division Awards in Bankruptcy?
I get a lot of questions on my bankruptcy blog from men and women who are looking for information about the effect of bankruptcy on divorce and support orders. Sometimes these questions come from individuals who are obligated to pay and want to use bankruptcy to reduce or eliminate those obligations and sometimes the questions come from ex-spouses who have received a bankruptcy notification in the mail and want to know what they should do.
Bankruptcy Code Generally Excepts
Family Law Debts from Discharge
As currently written, the Bankruptcy Code does not provide for the discharge many divorce or domestic relations type of debt. Bankruptcy Code Section 523(a)(5) makes a “domestic support obligation” non-dischargeable.
Section 523(a)(15) makes non-dischargeable any debt “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.”
As a practical matter this means that bankruptcy judges will avoid getting involved in child support, alimony or property division disputes. In general, a bankruptcy debtor cannot eliminate this type of debt using a bankruptcy.
Some Divorce Related Debts May be Affected by Bankruptcy
There are some issues which arise, however, that are not so cut and dry. For example, I sometimes see situations in which there is joint credit card debt and one spouse files bankruptcy. The other ex-spouse then gets a letter from the credit card company demanding payment on the outstanding balance. If the credit card debt was not mentioned in the divorce settlement the non-filing ex-spouse could have a problem.
I also see situations in which an ex-spouse is ordered to pay attorney’s fees - are these debts dischargeable?
I have also used Chapter 13 to “cure” child support arrearages by paying past due child support (in full) over time in a Chapter 13 plan.
When I meet with a prospective client who has been through a divorce or who has debts (or contingent debts that you may be required to pay or debts that someone else is supposed to pay) I will want to see all of the relevant paperwork, I will want to see credit reports and I will want to see copies of bills generated by the creditor.
Whether you are a prospective debtor or an ex-spouse looking for information about the possible dischargeability of divorce/domestic relations debt, you should not assume anything. You would be well served to consult with experienced bankruptcy counsel who can review your documents and advise you of your rights and obligations.
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