Is a Debt Owed to Your Ex Dischargeable in Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy allows a Florida debtor to discharge most of their pre-bankruptcy debts. Some debts, however, are deemed “non-dischargeable” under federal law, which means they remain enforceable even after the debtor completes the bankruptcy process. Such non-dischargeable debts often include money owed to a current or former spouse.
There are actually two types of non-dischargeable debts with respect to spouses. The first is “domestic support obligations.” This includes any alimony or child support established under a separation agreement, divorce decree, property settlement agreement, or other court order. The second is “familial obligations” that cover any other type of (non-domestic support) debt incurred in the course of a divorce or separation.
Could You Still Owe Your Ex for the Cost of the Wedding?
Sorting out whether a debt owed to a spouse or ex-spouse can be non-dischargeable can get complicated. Take this recent decision from a federal judge in Tampa, In re Darrell. In this case, the court ordered the bankruptcy judge to reconsider whether certain debts the debtor owed his ex-wife were non-dischargeable.
The debtor and his ex-wife married in 2019. They separated sometime thereafter and divorced in 2023. During their separation period, the ex-wife sued the debtor in Florida state court. She alleged the debtor owed her $3,000 for back rent, $1,800 on a personal loan she made to him before their marriage, and $6,728, which represented half the cost of their wedding.
The state court issued a civil judgment in favor of the ex-wife. The ex-wife then filed for divorce. Just before the divorce became final, the debtor filed for Chapter 7 bankruptcy. The ex-wife sought a judgment declaring the debts owed to her under the state court judgment were non-dischargeable.
The bankruptcy court rejected the ex-wife’s petition and found all of the debt owed to her dischargeable. On appeal, the district court disagreed. It assessed the ex-wife’s debts as follows:
- The back rent the debtor owed his ex-wife was dischargeable, because it was established during the parties’ separation in an official court proceeding, making it a “domestic support obligation.”
- Neither the loan nor the wedding debts are domestic support obligations. But they may qualify as “familial obligations.” The district court therefore directed the bankruptcy court to reconsider whether these debts were non-dischargeable.
Contact an Orlando Chapter 7 Bankruptcy Lawyer Today
The important takeaway here is that while filing for Chapter 7 bankruptcy can free you from many types of debts, one thing it will not do is help you get out from under an unfavorable divorce settlement. Most debts incurred as the result of a divorce are non-dischargeable. So you will likely still have to pay alimony and child support and honor the other financial terms of your divorce agreement even after bankruptcy.
If you need legal advice in connection with any bankruptcy matter, it is important to consult with an experienced attorney. Our Orlando Chapter 7 bankruptcy lawyers can review your case and advise you of your options. Contact Florida Law Advisers, P.A., today to schedule a free consultation.
Source:
scholar.google.com/scholar_case?case=8554488069973286229
