There are two kinds of debts owed to former spouses, spouses or a child of the debtor. A domestic support obligation is a debt owed to the “formers spouse, spouse or child of the debtor or a child support authority; in the nature of alimony, maintenance or support; established by a separation agreement, divorced decree or property settlement agreement in court order ….” This
is what you think of typically as child support or alimony. This debt is not discharged in a chapter 7 bankruptcy and is also not discharged in a chapter 13
bankruptcy pursuant to 11 U.S.C. § 523(a)(5).
Some of the factors courts look at to determine if the debt is a domestic support
obligation are; i) parties employment history, ii) whether one party received
marital property, iii) the number the number and frequency of payments, iv)
the economic disparity of the parties, v) the length of the marriage, vi) whether
the spouse who brings the complaint is caring for minor children, vii) age,
employability, and education levels of the parties, ix) the label in the decree
or agreement, x) whether the obligation terminates upon the spouse’s death,
remarriage or the emancipation of the children.
The second type of debt owed to a spouse, former spouse or child of the debtor,
is defined as a “property settlement” and is not discharged in a chapter 7 but is
discharged in a chapter 13 after you pay what you can afford to pay over a 3-5
year period of time pursuant to 11 U.S.C. § 523(a)(15). A property settlement
is a debt owed “to a spouse, former spouse or child of the debtor, is not a
domestic support obligation (like above) and was incurred in the course of a
divorce or separation or in connection with a separation agreement, divorce
decree or other order of the court.”
Typical types of property settlement obligations include “hold harmless”
provisions in a divorce decree where one spouse agrees to pay a joint debt
to a creditor and hold the other spouse harmless; sometimes if a person is
ordered to pay the ex-spouses’ attorney fees in the divorce that debt would
be discharged in a chapter 13, attorney fees owed to your own attorney are
discharged in a chapter 13 bankruptcy; sometimes fees owed for a child
representative or guardian ad litem are discharged in a chapter 13.
It is very important to talk to an attorney who has experience in bankruptcy
such as the attorneys at Bond & Botes, because a debt you might think is discharged in a chapter 7 may not be discharged, and a debt you think cannot be discharged in bankruptcy may be discharged after a chapter 13 bankruptcy plan is completed.