December 15, 2014 By:
If you have financial obligations from your divorce or separation decree OTHER than to pay child or spousal support, those obligations may be dischargeable under Chapter 13 bankruptcy.
The ability to discharge divorce-related debts is a confusing area of bankruptcy law because there have been many significant changes over these last few decades. So some things that you may be hearing may have been true once, but are no longer.
The bottom line is quite clear:
These other debts and obligations that can only be discharged under Chapter 13 are generally described as the “property settlement” side of the divorce. These tend to be either money that you owe to your ex-spouse to make up for receiving more of the assets — for example, if you received the more valuable vehicle — or your obligation to pay certain either joint or separate creditor obligations so that your ex-spouse does not need to.
Support debts are defined as debts “in the nature of alimony, maintenance or support . . . without regard to whether such debt is expressly so designated.” In other words, your divorce decree may not label some obligation as “support,” but the bankruptcy court can still determine that it is “in the nature of support.” For example if you were ordered in the decree to pay half of your ex-spouse’s monthly rent and health insurance premiums for five years, and there was no mention of any spousal support payments where normally there would have been, the rent/health insurance obligation may well be considered “in the nature of support.”
To schedule a free, confidential consultation with an experienced bankruptcy lawyer in Rockwall, Texas, please call me at 972-772-3083 or fill out this form and I will contact you to schedule an appointment. I do my best to answer all calls, but sometimes I am in court or with another client. Please leave a message if I do not answer the phone, and I will return your call as soon as possible.