Bankruptcy Discharge of Divorce Attorneys Fees

One spouse of often ordered to pay the attorney fees of the other spouse in a divorce.  In some cases, this obligation to pay the involved attorneys fees is dischargeable in bankruptcy.  This is one of the many issues presented in the application of bankruptcy law to obligations of alimony, child support, and marital settlement agreements. The bankruptcy code's provisions as to the dischargeability of support obligations were significantly changed in the 2005 amendments to the bankruptcy code. It should be noted that there are some differences in the provisions in chapter 7 and chapter 13 bankruptcy.

Atty. Jordan E. Bublick - 1221 Brickell Ave., 9th Fl., Miami, Florida

In some cases, divorce related attorney fees owed are dischargeable in bankruptcy, but in other cases they are not. It generally is based on whether the involved attorney fee fits within the bankruptcy code's definitition of a "domestic support obligation" (DSO).  A decision issued in the Bankruptcy Court in Miami in 2009 in the case of In re Maria D. Lopez, Case No. 08-18101-BKC-LMI (Bankr. S.D.Fla. April 17, 2009)(Isicoff, J.) provides an an example of the application of the rules.  In this case, the Bankruptcy Court held that the involved attorney fees were not entitled to priority status as a "domestic support obligation".

In this case, it was the ex-wife who sought to discharge her obligation to pay her ex-husband's attorney fees that he incurred in their dissolution of marriage case. In the dissolution of marriage case, the family cout awarded the debtor's ex-husband his attorney fees.  When the ex-wife filed for bankruptcy under chapter 13, the ex-husband sought to have these attorneys fees paid in full on a priority status as a "domestic support obligation."  priority status would require full payment and the lack thereof would subject to claim to status as a general unsecured creditor and typically only a small dividend.

Definition of a Domestic Support Obligation

The Court explained that the Bankruptcy Code provides that a DSO owed to a former spouse is entitled to priority status.  The Court noted thought that while an award of attorney fees in some instances may be considered a DSO, not every award of attorney fees in a dissolution of marriage case are entitled to DSO status.

The Court reviewed that  for a claim to be considered as a DSO, it must meet all the requirements of section 101(14A) of the Bankruptcy Code. Generally, the claim must be

1. owed to a spouse, former spouse, or child of the debtor, or such child's parent or guardian
2. be in the nature of alimony, maintenance or support
3. established or subject to establishment by reason of a separation agreement, divorce decree, or property settlement agreement or by court order
4. not assigned to a nongovernmental entity unless voluntarily assigned for purposes of collection

"In the Nature of Alimony, Maintenance, or Support"
At issue in this case was whether the attorney fees were  "in the nature of alimony, maintenance, or support."
The Court rejected the claimant's argument that the attorney fees met the requirement of being "in the nature of alimony, maintenance or support" finding that they instead related to something else - custody, parentage, or visitation.

The Court noted that the determination of what constitutes "support" is a matter of federal law. The Court further noted that in determining whether an award of state court attorneys' fees constitutes "support", the Bankruptcy Court may "only undertake a simple inquiry as to whether the debt can be characterized as 'support'" and that it may look to state law for guidance on whether the obligation should be considered in the nature of "support". Also the Court noted that the state court judgment awarded claimant attorney fees based on the debtor's litigation misconduct and not based on their respective wages or ability to pay.Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankruptcy Cases and Mortgage Modifications (305) 891-4055