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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33505
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Re Chapter 13 Bankruptcy: There is some confusion re the

Customer Question

Re Chapter 13 Bankruptcy:

There is some confusion re the debtor's right to rid the debtor's self of a debt incurred toward the debtor's former spouse.

It is believed that, without claim of hardship by the debtor, any debt uncured by the debtor in their divorce decree is not dischargeable. This is to say that such obligation by the debtor to pay the debtor's former spouse remains after bankruptcy including an unsecured obligation to pay an asset equalizing debt ordered within the divorce decree; and that the debtor's Plan must include provision for significant payment of such obligation including arrears; and if not, and the Plan is Confirmed without this provision, it must and can be appealed, i.e. there is a remedy.

Prime support of these facts, I believe, lies in 523(a)(15] of the Code.

Please clearly this situation stating the applicable code
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 3 years ago.
Customer wants a definitive answer...to the rescue! Surprised Cool

Whether or not a debt falls within the nondischargeable scope of Section 523(a)(5), or the dischargeable scope of Section 523(a)(15), depends upon whether the debt is considered "in the nature of support."

If the parties' intention was not to provide a necessity of life, the debt generally is not "support" for purposes of § 523(a)(5) nondischargeability notwithstanding the label given it. In re Moberly (BC ND CA 2001) 266 B.R. 187, 189; see also Shaver v. Shaver (9th Cir. 1984) 736 F.2d 1314, 1316.

Your facts suggest a secondary issue, i.e, that the debt was not scheduled. That is a big problem in a Chapter 13, because per Bankr. Code § 523(a)(3)(A) & (B), an unscheduled debt is not dischargeable -- except in a "no asset" Chapter 7 case, because there is no time limit on filing proofs of claim, if the bankruptcy trustee determines there are no assets to distribute. In re Nielsen (9th Cir. 2004) 383 F.3d 922, at 927.

Hope this helps.


Customer: replied 3 years ago.

You say:Whether or not a debt falls within the nondischargeable scope of Section 523(a)(5), or the dischargeable scope of Section 523(a)(15), depends upon whether the debt is considered "in the nature of support."

I reply: The court has "found" the debt to NOT be a DSO under 523(a)(5)..

That aspect is therefore moot.

You say further: "Your facts suggest a secondary issue, i.e, that the debt was not scheduled. That is a big problem in a Chapter 13, because per Bankr. Code § 523(a)(3)(A) & (B), an unscheduled debt is not dischargeable -- except in a "no asset" Chapter 7 case, because there is no time limit on filing proofs of claim, if the bankruptcy trustee determines there are no assets to distribute. In re Nielsen (9th Cir. 2004) 383 F.3d 922, at 927."


I reply: If you mean listed in the debtor's Plan, it was (is) so -listed and at less that 10% of the oblgation. And, as stated in the caption of my question, the matter is a Chapter 13 matter.There is asset (disposable monthly iincome) after regular unsecured debts at pad per Plan (Credit cards). There is no, or negligable secjured debt. This aspect also appears to be moot.

Are we not back to the origiinal question:? I. e., " In Cjapter 13: , without claim of hardship by the debtor, any debt uncured by the debtor in their divorce decree is not dischargeable. This is to say that such obligation by the debtor to pay the debtor's former spouse remains after bankruptcy including an unsecured obligation to pay an asset equalizing debt ordered within the divorce decree; and that the debtor's Plan must include provision for significant payment of such obligation including arrears; and if not, and the Plan is Confirmed without this provision, it must and can be appealed, i.e. there is a remedy." ?

 

 

PLEASE CORRECT WORD "UNCURED" TO "UNSECURED" IN 2ND SENTENCE, LAST PARAGRAPH, ABOVE.

Expert:  socrateaser replied 3 years ago.

You say:Whether or not a debt falls within the nondischargeable scope of Section 523(a)(5), or the dischargeable scope of Section 523(a)(15), depends upon whether the debt is considered "in the nature of support."

I reply: The court has "found" the debt to NOT be a DSO under 523(a)(5)..

That aspect is therefore moot.

 

A: Mootness means an issue which is no longer of any legal significance. If the court found the debt to not be a domestic support obligation, then that is very significant, because it means that the debt is absolutely dischargeable in Chapter 13.


You say further: "Your facts suggest a secondary issue, i.e, that the debt was not scheduled. That is a big problem in a Chapter 13, because per Bankr. Code § 523(a)(3)(A) & (B), an unscheduled debt is not dischargeable -- except in a "no asset" Chapter 7 case, because there is no time limit on filing proofs of claim, if the bankruptcy trustee determines there are no assets to distribute. In re Nielsen (9th Cir. 2004) 383 F.3d 922, at 927."


I reply: If you mean listed in the debtor's Plan, it was (is) so -listed and at less that 10% of the obligation. And, as stated in the caption of my question, the matter is a Chapter 13 matter.There is asset (disposable monthly income) after regular unsecured debts at pad per Plan (Credit cards). There is no, or negligible secured debt. This aspect also appears to be moot.

 

A: If the debt was listed, and found to not be a domestic support obligation, then it is discharged upon the full compliance of the Chapter 13 plan as confirmed.

 

Are we not back to the original question:? I. e., " In Chapter 13: , without claim of hardship by the debtor, any debt uncured by the debtor in their divorce decree is not dischargeable. This is to say that such obligation by the debtor to pay the debtor's former spouse remains after bankruptcy including an unsecured obligation to pay an asset equalizing debt ordered within the divorce decree; and that the debtor's Plan must include provision for significant payment of such obligation including arrears; and if not, and the Plan is Confirmed without this provision, it must and can be appealed, i.e. there is a remedy." ?

 

A: Hardship is irrelevant to the issue of dischargeability. The creditor has the burden of proof on whether or not a domestic support obligation is nondischargeable. Tilley v. Jessee (4th Cir. 1986) 789 F.2d 1074, 1077.

Therefore, based upon the above-discussed issues, the debt is absolutely dischargeable upon full compliance with the Chapter 13 plan.

 

The court finding that the debt was not a domestic support obligation could be appealed to the bankruptcy appellate panel or district court, within 14 days of the entry of the bankruptcy court order. If the finding did not discuss the "nature of support" issue, then that may provide an avenue to obtain a reversal on the grounds of misapplication of facts and law. But, in my view, that is the only means of undoing the current dischargeable status of the debt -- i.e., the only possible "remedy."


Hope this helps.

 

 


 

Customer: replied 3 years ago.

Well, sorry, but I believe we are still back to the original question which I do (again) quote::

" In Chapter 13: , without claim of hardship by the debtor, any debt unsecured by the debtor in their divorce decree is not dischargerable. This is to say that such obligation by the debtor to pay the debtor's former spouse remains after bankruptcy including an unsecured obligation to pay an asset equalizing debt ordered within the divorce decree; and that the debtor's Plan must include provision for significant payment of such obligation including arrears; and if not, and the Plan is Confirmed without this provision, it must and can be appealed, i.e. there is a remedy." ?

 

I find nothing in the above question that relates to or asserts anything therein relative to a/any "domestic support obligation".( I. e., I believe the question is what it is!). - unless you are volunteering DSO in your answer as a contingency.

 

(There may be or could be issue(s) re DSO, but the contingency of same is not one addressed in the question.)

Expert:  socrateaser replied 3 years ago.
The definitive answer to the question is that (1) if the debt is determined to not be in the "nature of support," and (2) the debt is scheduled in the Chapter 13 plan, then the debt is dischargeable -- period, end of story.

You may view my conclusion as the product of unbridled ego. That is your choice. However, I have answered about 25,000 questions during the past three years at this website, and during that time, about six of my answers have been proved wrong.

So, I shall make you this gentleperson's bet. One day in the not too distant future, after you have exhausted yourself looking for some other answer, you will remember our little chat here, and you will say to yourself, "I should have listened to thatCustomer-- he was right, and everyone else was wrong."

Best wishes in your quest.

Customer: replied 3 years ago.

Dear Mr.Customer

 

I do not question your ability or experience in this forum. In fact, you are to be commended for participating to the extent your describe.. I am sure a lot of public education is needed.

 

The facts are, I've received directly opposite answers from two other participants with tenure and experience in this forum approaching yours.

 

Here is the question posed to one - and the answer:

 

I am a lawyer with 25 years experience. While I am not your lawyer and do not represent you, I will endeavor to provide you with legal information through this open and no confidential forum.
The obligation is not dischargeable-

Section 523 of the Bankruptcy Code excepts from discharge both property settlements and support obligations.
You can read the Code here:
http://www.law.cornell.edu/uscode/html/uscode11/usc_sec_11_00000523----000-.html

 

Here is another: A debt to a "former spouse...of the debtor...that is incurred by the debtor...in connection with a...divorce decree..." is non-dischargeable. Bankruptcy Stat. 523(a)(15).

And another: "I am saying that given the information you provided, it appears that you have a valid non-dischargeability claim based on 523(a)(15)"

However, another, a local attorney, after examining all papers in this matter, said the obligation is dischargeable, agreeing with you.

Still another local attorney after examining all the papers in this matter, said that I do not have to do anything; the debt is NOT dischargeable and I am entitled to full monthly payments as ordered in the decree plus arrears.

I am very sorry, but I do feel compelled to point to the question
Expert:  socrateaser replied 3 years ago.
No worries.

The reason why I can be so definitive on this issue is because I pay thousands of dollars per year to maintain access to legal database services which are not available on the internet, and which contain treatises by authoritative authors. The information in my answers to you is extracted from a book written by a sitting 9th Circuit Bankruptcy Court Judge.

So, while I understand that you may have questions about the difference between my answer vis-a-vis my colleagues', I will simply state that I challenge anyone (whether an expert in this forum, or an attorney in the "real world") to prove with citations to legal authority that my answer to your question is in error.

In fact, I would welcome being proved wrong, because I want to know when I'm in error -- I pride myself on accepting errors when I make them, because that's the only way anyone ever learns anything. Moreover, if I"m wrong, then you have an avenue to win your claim.

That said, I realize that you are entrenched in what you believe is the fight of your life. However, the question you have posed is actually fairly straightforward in application -- and that is why the bankruptcy judge apparently found as he/she did.

In sum, I stand by my answer as correct, i.e., a non-domestic support obligation incurred in connection with a marital dissolution is dischargeble as part of a Chapter 13 plan, fully complied with by the debtor. Bankr. Code § 1328(a).

Best wishes.

NOTICE: My goal here is to educate others about the law. I am always available to answer your follow-up questions after you click Accept – however, if you do not click Accept, the website gets paid, and I receive nothing. This is true, even if you are on a subscription plan. So please click Accept, so that I will be able to continue to provide this service for others in the future.

Customer: replied 3 years ago.
In other words, you dispute and do state that paragraph 15 under section 1328b [Plan], sub-sub chapter 523(a) [Exceptions to Discharge], Sub-chapter II of Chapter 13, Title 11 of the U. S. Bankruptcy Code is incorrect, unenforceable, and/or does not prohibit discharge of a debt incurred by a debtor in connection with a divorce decree, U S.C. 523(a)(15).

 

Expert:  socrateaser replied 3 years ago.
Please click Accept for my original answer, and I will be happy to consider your new question.

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