The question often arises to what extent are divorce debts discharged in bankruptcy?A divorce often generates several different types of debts to a divorced person considering filing for bankruptcy. Chief among them are:
The Bankruptcy Code exceptions to discharge of divorce debts are divided into two categories. One category is domestic support obligations. The other is property-settlement obligations.
Domestic support obligations are generally divorce debts owed to a former spouse, child, or guardian, that are in the nature of alimony, maintenance or support and established by a divorce decree or separation agreement.
Domestic support obligations are non-dischargeable in both a Chapter 7 and Chapter 13 bankruptcy.
The other chief category is property settlement obligations. Virtually all property settlement obligations and other divorce related obligations are non-dischargeable in a Chapter 7 bankruptcy.
In a Chapter 13 completed plan discharge, however, the property settlement debts are discharged. This alone may be a significant reason to file a chapter 13. Thus, it is important at times to distinguish a non-dischargeable support obligation from a dischargeable property settlement obligation. The three main factors bankruptcy courts look at in determining whether it is a non-dischargeble domestic support obligation is:
If the obligation served as a source of income for the former spouse at the time of the divorce, it will usually be considered a non-dischargeable support obligation.
Have your financial situation considered by an experienced bankruptcy attorney andformer Trustee for the U.S. Bankruptcy Court. Call or contact LONG & LONG P.C.now at 303-832-2655, or www.denverbankruptcylawyer.net.
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