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Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17223
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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does a pre petition court ordered attorney fee for spouse have

Customer Question

does a pre petition court ordered attorney fee for spouse have to be listed as a priority claim in non consumer chapter 7 filing.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 6 years ago.
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
If your chapter 7 will only be filed on your non consumer debts, but you are a personal guarantor to these debts, you should list the attorney fees as a priority debt, however the bankruptcy court in most cases will not allow you to discharge them, as they are Court ordered and considered exempt.

Priority claims in bankruptcy are as follows:
The order of payment, as set out in § 507, is as follows:
Claims for debts to spouse or children for court ordered support
Administrative expenses of the bankruptcy
Unsecured, post petition claims in an involuntary case
Wage claims of employees and independent salespersons up to $10,000 per claim
Contributions to employee benefit plans up to $10,000 per employee
Claims of farmers and fishermen against debtors operating storage or processing facilities.
Layaway claims of individuals who didn't get the item they made the deposit on
Recent income, sales, employment or gross receipts taxes
Customer: replied 6 years ago.

I am the spouse of the debtor. If the debtor is current in his chapter 7 non consumer petition does the dso have to be listed anywhere on petition.

Expert:  WALLSTREETESQ replied 6 years ago.
He will have to list it, as a priority unsecured debt. The majority of his debts do have to be non consumer however.

The Bankruptcy Code defines “consumer debt” as “… debt incurred by an individual primarily for a personal, family, or household purposes.” Courts have interpreted this definition widely, but it is important to keep the proportion of debt that has been incurred for the purpose of forwarding an existing business enterprise in mind in particular.
Customer: replied 6 years ago.
debtor was ordered to pay NY property tax on spouse's condo pre pettion chapter 7 non consumer. debtor lists tax lien for condo on shedule D. Is this considered domestic support or tax lien?
Expert:  WALLSTREETESQ replied 6 years ago.

it is a court order it will be considered a priority non secured debt unless the tax lien is on his name.


If he listed it on his scheduale d, he would have to reaffim the debt meaning he will pay it outside the bankruptcy as it will not be discharged.


Schedule D will list all of the creditors that have secured claims against you. Secured means there is property attached to them that can be taken if the claim is not paid, such as a house, car or insurance policy

Customer: replied 6 years ago.
The mortgage, maintenance and taxes for NY condo were part of pre-petition DSO. Debtor did not list any DSO on his non consumber bankruptcy filing. The tax lien was in his name but property was in both our names. Did debtor have to list the responsibility for the taxes as a domestic support obligation? I would like to pay you a bonus if we could continue this dialogue.
Expert:  WALLSTREETESQ replied 6 years ago.
Since it was in his name, and if he listed it on the petition stating he will pay it is fine, he did not have to list it as a domestic order liability as his name makes him liable. Regardless of how it was listed he is liable to pay the entire amount, and it can be enforced through the courts, either bankruptcy court or family court.
Customer: replied 6 years ago.

The debt was ultimately paid as a DSO obligation. But, due to the fact that he didn't claim the DSO anywhere on his filing I was put in financial jeopardy. I would like to start from the beginning and find out if the omission of the DSO is allowed in a Chapter 7 non consumer bankruptcy.

Expert:  WALLSTREETESQ replied 6 years ago.
It is not allowed if he had a domestic support obligation he should have listed them, however the tax lien could have been listed at both places, due to the fact the tax lien was in his name it could have been listed as a personal debt, or as a support oder as he was required to pay it,. If he did not pay the lien that is the issue, if the court discarded the debt and he did not list as a domestic order he would have committed fraud.
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.

Is the Trustee of a non consumer chapter 7 bankruptcy obligated to notify the domestic support recipient of the obligation that is due to her?

Expert:  WALLSTREETESQ replied 6 years ago.
no, however all listed creditors are supposed to be notified so the court should have sent a notice to the tax lien holders.
Customer: replied 6 years ago.
The BAPCPA rules do not apply in a non consumer bankruptcy?
Expert:  WALLSTREETESQ replied 6 years ago.
they do apply, but if he did not list it as a domestic order you would not receive notice.
Customer: replied 6 years ago.

my divorce attorney did not object to having the divorce action administratively closed (in circuit court) due to bankruptcy the day before the 341 hearing. at 341 hearing my husband's bankruptcy attorney claimed that the DSO was "waived". it took five months to lift the stay in bankruptcy court and circuit court for divorce action to move forward regarding property. the DSO was non dischargeable and not "waived". I live in New York and the divorce was in Michigan. the attorney fees were astronomical in comparison to the settlement. if the DSO was acknowledged at the 341 hearing then the Trustee, the Trustee's attorney, my husband's attorney and my husband admitted to the DSO.

how do I unravel the "who comes first responsibility" in the DSO mistake.

Expert:  WALLSTREETESQ replied 6 years ago.
the divorce should not have been closed, possibly stayed, but not closed, the order from the court regarding the domestic order should have been an easy argument and taken care of easily in Bankruptcy court, I would think you divorce attorneys mistake was having the case closed.