Dischargeability of Divorce Debt in Bankruptcy

Although certain types of divorce related debt are non-dischargeable, certain types of debt are dischargeable in bankruptcy Whether an item is dischargeable also depends on whether the case is filed under chapter 7 or chapter 13.

Domestic Support Obligations - Alimony, Maintenance or Support

"Domestic Support Obligations" are not dischargeable in chapter 7 or chapter 13. Section 523(a)(5) of the Bankruptcy Code excludes from discharge any debt "for a domestic support obligation." A domestic support obligation is a

               "debt...owed to or recoverable by (i) a spouse, former spouse, or child of the debtor or such                        child's parent, legal guardian, or responsible relative...in the nature of alimony, maintenance, or                      support of such spouse, former spouse, or child of the debtor of such child's parent, without regard                to whether such debt is express so designated; ... established ...by reason of (i) a separation                          agreement, divorce decree, or property settlement agreement. 11 USC 101 § 101 (14A) 

The determination of whether a particular divorce-related debt is a "domestic support obligation" is a question of federal law. In making this determination, the court "cannot rely solely on the label used by the parties" and must "look beyond the label to examine whether the debt actually is in the nature of support or alimony." Cummings. v. Cummings, 244 F.3d 1263, 1265 (11th Cir. 2001).  Courts have held that the touchstone for dischargeability of a domestic support obligation is the intent of the parties. Cummings, 244 F.3d at 1266. Whether a debt is "in the nature of ... support" is determined by an element of need. In re: Lutzke, 223 B.R. 552, 554 (Bankr. D. Or. 1998). Where a former spouse does not establish an element of need or a disparity of incomes, courts generally hold that a debt cannot be characterized as a "domestic support obligation". 

Debts from Property Settlements- Chapter 7 and Chapter 13

Debts, such as those incurred in a property settlement agreement, to a spouse, former spouse, or child of the debtor that are not "domestic support obligations" that are "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 court" are also not dischargeable in chapter 7, but they are generally dischargeable in a chapter 13 case. Steele v. Heard, 487 B.R. 302, 308 (S.D. Ala. 2013).  
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases and Mortgage Modifications