Can a divorce settlment be discharged in bankruptcy?
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Can a divorce settlment be discharged in bankruptcy?
Asked on July 19, 2011 under Bankruptcy Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Support obligations are non-dischargeable in bankruptcy. Non-support obligations from a divorce are generally non-dischargeable under a Chapter 7 (i.e. the obligated spouse must still pay). The discharge under a Chapter 13 is broader than under a Chapter 7. Debts dischargeable in a Chapter 13 include debts arising from divorce property settlements.
How do bankruptcy courts decide what's a support obligation versus what's a property settlement? It varies greatly by state. The way in which the divorce decree is written can reduce/increase the chance that the bankruptcy court will discharge the debt. To the extent that an obligation can be labeled as alimony or support (spousal/child), is good for the non-obligated spouse but no so for the souse who must pay.
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