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In general, Chapter 7 bankruptcy will discharge a debtor's pre-petition debts with a few exceptions. One of those exceptions includes debts related to divorce; however, there are some divorce related debts which can be discharged in bankruptcy.

Two of those exceptions apply to domestic obligations. First, debts (a) owed by a debtor to his former spouse, (b) arising under a divorce decree, and (c) in the nature of alimony, maintenance, or support are non-dischargeable under ? 523(a)(5). Second, marital debts that are not support obligations are non-dischargeable under ? 523(a)(15), unless (a) the debtor is unable to pay such debts, and (b) the benefit that the debtor would receive from the discharge would be greater than the harm that the discharge would cause to the non-debtor spouse. Whereas ? 523(a)(15) "requires the Court to review the impact of the obligations on the current circumstances of the parties and consequences of the discharge of those obligations on both parties," subsequent events are irrelevant to the ? 523(a)(5) inquiry.

Nondischargeable Divorce Related Debts

If a family court judge rules that a debtor must pay alimony and child support, those obligations cannot be discharged in Chapter 7 bankruptcy. But that nondischargeability status only applies to support obligations. Debts which derive from divorce proceedings that are not for the support of a former spouse or children might be dischargeable in bankruptcy if paying them would cause great harm to the debtor.

Definition Of Nonsupport Debt In Bankruptcy

Defining nonsupport debt in bankruptcy relies heavily on the discretion of the bankruptcy trustee and/or judge. The bankruptcy judge and trustee are not obligated to use the label of marital debt given by a state court. The bankruptcy court must determine whether a debt is a support obligation specifically for the purposes of the bankruptcy case. If a creditor, in most cases a former spouse, wants to challenge the discharge of a debt labeled nonsupport, they will need to prove that the obligation is in fact intended to support them or their children.

Ability To Pay Nonsupport Obligations

If a bankruptcy debtor can prove that paying the nonsupport obligation will cause more harm to them, than benefit to the creditor, they may be able to discharge the debt. However, the bankruptcy court must carefully consider how discharging the nonsupport debt will impact both parties in the bankruptcy. But in most cases, if a debtor can prove that a debt is a nonsupport obligation and that they are incapable of paying the debt, they can probably win a bankruptcy discharge of that particular debt.

Reed Allmand, sponsoring attorney for Bankruptcy.net, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit http://www.bankruptcy.net for up to date news and information you need to know.

By Reed Allmand
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