Divorce Related Debts In Bankruptcy
Generally speaking a debtor cannot discharge in bankruptcy debts that are categorized as “domestic support obligations. What are domestic support obligations?
- Child Support
- Or other debt that is accrued because it is related to supporting the spouse or offspring of the debtor.
However a debtor may be able to discharge divorce related debt which is not related to “domestic support.”
Below are some examples of situations where a debtor might be able to discharge divorce related debt:
- The debtor who incurs debts because an award is made against them to offset assets which were given to them by the other spouse may be able to discharge those debts in bankruptcy. Since the award is not support related it might be dischargeable in bankruptcy.
- The debtor incurred attorney fees during a custody dispute during or after their divorce. Those attorney fees may be dischargeable in bankruptcy.
A matter of fact, any debts related to divorce but not related directly to the alimony, support or maintenance of the spouse or children may be dischargeable in a Chapter 13 bankruptcy case, but not in any other chapter.
In a 2010 bankruptcy case involving attorney’s fees which were accrued because of a visitation dispute between the grandparents and the mother of the children, the bankruptcy trustee ruled that the attorney’s fees could be discharged in bankruptcy. And because the attorney’s fees were not related to “domestic support” debt, they were not protected from bankruptcy discharge.
However, many bankruptcy courts have been inconsistent when determining the dischargeability of debts which are not directly tied to “domestic support” obligations. While some bankruptcy judges rule that debts not directly tied to support of the spouse or child are dischargeable in bankruptcy, other judges have shown some flexibility in that regard.
Have Questions Regarding Divorce and Bankruptcy?
If you have any questions regarding divorce and bankruptcy you can always give us a call, submit your questions here or even set up a free consultation.