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DIVORCE 17: Judgment states, obligations owed to each other shall be deemed a support obligation which is not dischargeable in Bankruptcy.

The parties were married later in life in 1996, and filed cross-complaints for divorce in 2012.

The judgment required plaintiff to pay defendant $1,000 in monthly spousal support for a set period, to be set off by payments defendant received directly from plaintiff’s pension through a qualified domestic relation order (QDRO). The parties’ personal property settlement included a provision stating that all marital debt shall be evenly divided between the parties. In the event of a bankruptcy, those debts may be discharged.

The judgment also contained a separate provision entitled nondischargeability of obligations and debts, stating: to the extent either party is required by the terms of the Judgment to assume responsibility for paying certain debts, including obligations owed to each other, such obligation shall be deemed a support obligation under 11 U.S.C. Section 523 (a) (5) which is not dischargeable in Bankruptcy as to the other party.

The parties were in severe financial straits when they filed for divorce and anticipated that both would soon file for bankruptcy. At the July 3, 2013 settlement hearing, counsel for both parties indicated that bankruptcy was imminent. Plaintiff did file for bankruptcy and secured the discharge of his debts, including his half of those bills making up the marital debt.

Unlike plaintiff, and apparently against the advice of her attorney and the court, defendant did not file for bankruptcy and lost the marital home to foreclosure. Defendant sought court intervention and secured several adjustments to the spousal support award. In a 2015 motion to enforce the judgment and to show cause, defendant contended for the first time that plaintiff had not met his divorce judgment obligation to pay half of the marital debt.

While the debts may have been, and were discharged via a bankruptcy, further provisions of the Judgment of Divorce indicated that any debts set forth in the judgment were deemed support and not dischargeable. In essence, while a bankruptcy court could discharge the debts, they still remained owing to that party to whom they were payable as support, which is not dischargeable.

Nobody has ever disputed, Judge, that they could go into Bankruptcy Court and discharge those creditors, the credit card company, the mortgage. They could have those discharged, but they still owe the debts to each other. And defendant made it clear that she did not want to file bankruptcy. She had no intent of walking away from her obligations.  She’s still trying to make these payments. The court then ordered plaintiff to remit his share of the marital debt directly to defendant.

Were you just served with divorce papers? In order to protect your financial rights, it is important to have an experienced and understanding divorce attorney by your side at every step of the way.

Contact Aldrich Legal Services

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