Can a person get rid of alimony or child support requirements through a Chapter 7 or Chapter 13 bankruptcy?
It's a common story. Most Bucks County divorce lawyers should know that despite difficulty in distinguishing between property division and support obligations, several criteria for deciding the issue do exist. By far the most important two concerns are: 1) the intentions of the parties and/or the divorce court at the time the obligation was formed; and 2) the effect and function of the obligation imposed
A state or a federal court must apply federal bankruptcy law, not state law in an action under 11 U.S.C.S. § 523(a)(5). In assessing the nature of the underlying marital obligation at issue, courts will look to the intent, form, characteristics and purposes served by the imposed marital debt. Often these features of the debt can be judged only on the basis of state matrimonial law. However, characterization of the debt under state domestic relations law will not necessarily dispose of the dischargeability issue. Both the language of the § 523(a)(5) and the countless federal bankruptcy cases interpreting it dictate that a court eschew a rigid application of state law labels in favor of a search for the substance and function of the obligation involved. Moreover, this search must be conducted with an eye toward the purposes underlying the bankruptcy code and the exception to discharge created by § 523(a)
Then there is the case of Buccino v. Buccino, 397 Pa. Super. 241 (Pa. Super. Ct. 1990). Here, Appellant challenged a decision of the Court of Common Pleas of Susquehanna County that found debts arising from the parties' divorce decree were necessary for the support and maintenance of appellee spouse and the parties' minor child and therefore were not subject to discharge in bankruptcy. The parties' divorce decree imposed various financial liabilities on appellant. Subsequent to the entry of the divorce decree, appellant filed a bankruptcy petition with the federal bankruptcy court, listing appellee as a creditor and seeking discharge under 11 U.S.C.S. § 523(a)(5) of the liabilities imposed by the divorce decree. The bankruptcy court granted appellee's motion to have a state court determine the dischargeability of debts pursuant to the divorce decree. The state court held that the debts in question were necessary for the support and maintenance of appellee and the parties' minor child and therefore were not subject to discharge in bankruptcy. The appellate court affirmed the lower court's decision. The court held that the debts in question did not arise solely from the division of martial assets, but were rather in the nature of support or alimony and therefore were not dischargeable in bankruptcy proceedings.
The appellate court affirmed the decision of the lower court and held that the marital debts at issue were in the nature of support or alimony not merely the division of marital assets and therefore were not dischargeable in bankruptcy.