Judgement in Divorce Dischargable?

[daver443]

Me and my ex-wife wrote our own seperation agreement, we ended up fighting it in court for 4 years over what each of us meant.. needless to say I got laid off and couldnt pay my attorney any longer, he petitioned the court to be removed (he was also retiring) He directed me to bankruptcy and told me I could posibly if she won get it discharged. I represented myself however the judge seemed to already have his mind made up prior to me even speaking.

I now owe her 50k and my entire family income is less then 40k a year, after rent, utilities, food its a negative.. is there a way to discharge this debt in my bk?

[justbroke]

Typically, judgments from divorce are non-dischargeable. The judge made up his mind because you had no legal basis to discharge the debt. The judge probably based his/her opinion on what you wrote in your papers as well as applied the law in your favor. Certain debts related to a dissolution of marriage, including support obligations (alimony, child support), are "excepted" from discharge and you can find this in 11 USC 523.

I do not know the specific nature of the debts that you have ($50K), but it is likely that the judge ruled correctly. It is pretty cut and dry.

[despritfreya]

This obligation would be non-dischargeable in a Chapter 7 either under 11 USC 523(a)(5) if it is "in the nature of support" or under 11 USC 523(a)(15) if it is anything other than "in the nature of support". The question is. . . is the $50k "in the nature of support" or simply a property settlement?

If it is not "in the nature of support", it may be dischargeable in a Chapter 13. Even if you think it is not "in the nature of support", the bk judge has an independent right to make that determination. You should discuss this with a bk attny.

Des.

[daver443]

the $50k was from our joint residence, somehow, my ex never agreed to sell the home, it foreclosed and now I owe her, her 50k of equity she had when we seperated...

[despritfreya]

the $50k was from our joint residence, somehow, my ex never agreed to sell the home, it foreclosed and now I owe her, her 50k of equity she had when we seperated...

This sounds like a property settlement which would be dischargeable in a Chapter 13. But your ex has a right to file a complaint to have the bk court determine if it is "in the nature of support" and if, the judge rules that it is, it is not dischargeable and becomes a "priority" claim.

Again, talk to a bk attny.

Des.

[bcohen]

This sounds like a property settlement which would be dischargeable in a Chapter 13. But your ex has a right to file a complaint to have the bk court determine if it is "in the nature of support" and if, the judge rules that it is, it is not dischargeable and becomes a "priority" claim.

Again, talk to a bk attny.

Des.

So what happens if the debt cannot be discharged, but the money simply isn't there to pay it, and still pay other necessary living expenses? Can he remain in an open Chapter 13 to prevent any attempt to collect on this debt for the duration of the plan, and then file again as soon as the discharge is granted, if necessary?

[justbroke]

bcohen, the problem in a Chapter 13 is whether this is a "priority" claim. That means it MUST be paid during the Chapter 13. The only way to determine as to whether you could get it discharged is to file a Chapter 13 and see if the ex-spouse files a complaint to have it non-dischargeable. That would make it a priority claim; meaning that it must be paid and must be paid after the administrative claims... but they are usually paid at the same time as the administrative claims (attorney fees, trustee percentage).

If this is a true domestic support obligation (or DSO), then it may even need to be kept current after filing. I have never had these issues since I have no children or owe any DSOs.

I know that Des is on to something. File a Chapter 13 and file a complaint to determine dischargeability on the so-called DSO (property settlement). If the judge finds it to not be a DSO, then it is discharged and would be treated as a general unsecured claim in the bankruptcy, and paid from the unsecured pool.

[Pjmax]

I believe Daver has to file a 7. Not enough income to support a 13, based on his other posts. $2215/mo. Income and $1800 in rent.

[justbroke]

I believe Daver has to file a 7. Not enough income to support a 13, based on his other posts. $2215/mo. Income and $1800 in rent.

You can ALWAYS file a Chapter 13! A Chapter 13 is just a Reorganization of the Debtor, where Chapter 7 is a Liquidation. The only major requirement for a Chapter 13 is "regular" income. (There are some districts that require a small token amount paid to unsecured creditors.)

Additionally, anyone paying $1,800/month rent and only taking home $2,215/month has some serious expense issues. Not to beat that horse, but that is one thing a Chapter 13 would force, is reasonable housing.

The reason a Chapter 13 is recommended in this case, is that a Chapter 13 can discharge more debts than a Chapter 7.

[Pjmax]

Good to know, JB, thanks for info.

[daver443]

This is where I am confused, I have consulted several attorneys, locally and until reading the NOLO book and here I was told by each one (2 are highly respected local attorneys and quite pricey) that a Chapter 7 was in order. one mentioned if the court would not let everything go in the 7, that we could file a 13 immediately after (or was that vice versa?) which I noticed in the NOLO book as a "Chapter 20" as it is refered to.. would this be a option? or should I even look at that? My Ex, has not tried to collect at all since the official ruling which was several months ago..

[daver443]

I just read the statutes noted above from despritfreya , why would several attorneys tell me that they could "likely" get the 50k judgement discharged? it seems cut and dry.. Or am I missing something

[despritfreya]

Go back to those attnys and ask them how and why in light of 523(a)(15). My guess is that they are suggesting a Chaptet 13.

Des.

[justbroke]

I just read the statutes noted above from despritfreya , why would several attorneys tell me that they could "likely" get the 50k judgement discharged? it seems cut and dry.. Or am I missing something

Yes, you are missing something. Re-read where Des wrote that the creditor, your ex-spouse, could file a complaint to determine dischargeability. It would be up to the Judge to determine whether it is in the "nature of support". In a Chapter 7, items are non-dischageable under 11 USC 523, but under a Chapter 13, the non-dischargeable items are listed in 11 USC 1328!

A Chapter 13 has a more powerful discharge. The kicker is that 11 USC 523(a)(15) "excepts" from discharge, a divorce decree -- in Chapter 7 cases. The Chapter 13 equivalent, 11 USC 1328, does not except it from discharge unless it is in the nature of support. In a Chapter 13 discussion, if the Judge found it to be in the nature of support, then it would be non-dischargeable.

That's the difference.

And as Des just added, they were probably looking from a Chapter 13 perspective. (Des posted before I did!)

[daver443]

So, am I correct in thinking that in a 7, the Judge would have to decide if it was dischargeable or not, if she filed a complaint?
(Also let me add, I had terrible insomnia last night and may not be reading all this correctly didnt get any sleep last night and slowly crashing now)