Bankruptcy & Divorce
The Bankruptcy Code makes a Domestic Support Obligation ("DSO") non-dischargeable in bankruptcy. There are many questions that determine whether an obligation under a Judgment of Divorce is a non-dischargeable DSO. One question is whether the obligation is in the nature of support. Child Support and Alimony are clear examples of obligations that cannot be discharged, but the question becomes more complex when you are dealing with obligations to pay mortgages, credit card debts, attorneys fees, and other outstanding debts of the parties. Generally an obligation under a Judgment of Divorce will be considered a DSO and determined non-dischargeable through bankruptcy, but there are exceptions. It has been held by a Michigan court that a defendant's court-ordered attorney fee debt to his former spouse would have constituted a nondischargeable obligation if he filed for a Chapter 7 bankruptcy. It is essential to have an attorney who has dealt with this area of law to ensure that you are protected after a divorce.Challenging Domestic Support Obligation in Bankruptcy Court
To challenge whether an obligation is non-dischargeable as a DSO an aggrieved party must file an adversary proceeding with the Bankruptcy Court and a complaint must be filed in the bankruptcy court no later than SIXTY (60) days after the first date set for the meeting of creditors.
The Bankruptcy Code requires limited specified elements of proof: (1) a debt is owed "to a spouse, former spouse, or child of the debtor;" (2) the debt is not a DSO; and (3) the debt "is incurred by the debtor in the course of a divorce or... divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit."