Dear italkfree,
The short answer to your question is that under most circumstances a
Florida alimony award would not be dischargeable in Chapter 7
bankruptcy proceedings. There are some narrow exceptions, outlined
below.
Chapter 7 bankruptcy is governed by federal law. While you are correct
that there can be an effect on bankruptcy proceedings, depending upon
where the bankruptcy is filed, the dischargeability of alimony is
governed by the federal statutes.
Discharge under "Chapter 7" is governed by Title 11 of the United
States Code, Subchapter II, Section 727 (abbreviated at 11 USC 727).
That provision can be found on Cornell Law School's Legal Information
Institute website:
* http://www4.law.cornell.edu/uscode/11/727.html
That provision is limited by 11 USC 523, "Exceptions to Discharge",
also available on the Legal Information Institute website:
* http://www4.law.cornell.edu/uscode/11/523.html
The "Exceptions to Discharge" section 11 USC 523(a)(5) provides that
"A discharge under section 727 ... of this title does not discharge an
individual debtor from any debt - to a spouse, former spouse, or
child of the debtor, for alimony to, maintenance for, or support of
such spouse or child, in connection with a separation agreement,
divorce decree or other order of a court of record, determination made
in accordance with State or territorial law by a governmental unit, or
property settlement agreement ...", specifying two exceptions.
The first exception is at 11 USC 523(a)(5)(A), ... but not to the
extent that "such debt is assigned to another entity, voluntarily, by
operation of law, or otherwise (other than debts assigned pursuant to
section 408(a)(3) of the Social Security Act, or any such debt which
has been assigned to the Federal Government or to a State or any
political subdivision of such State)". In other words, if the alimony
has been assigned to somebody other than the spouse designated by the
family court to receive the alimony, except as outlined in that
paragraph, it is dischargeable.
The second exception is at 11 USC 523(a)(5)(B), ... but not to the
extent that "such debt includes a liability designated as alimony,
maintenance, or support, unless such liability is actually in the
nature of alimony, maintenance, or support". In other words, if the
bankruptcy court finds that the parties chose to mischaracterize part
of the divorce settlement as "alimony", the debt might be
dischargeable. This type of finding typically occurs either when a
spouse fears that the other spouse will declare bankruptcy following
divorce, and they intentionally mischaracterize part of the property
settlement as "alimony" to try to make it nondischargeable in
bankruptcy, or where the trial court concludes that the divorce and
alimony provisions represent a scheme by the spouses to try to exclude
part of the debtor's estate from the bankruptcy proceeding.
Research Strategy:
I knew the answer from legal practice in the area of family law. I
confirmed it and found the appropriate citations by going to the Legal
Information Institute website and looking up the relevant provisions
of the United States Code.
* http://www.law.cornell.edu/
I hope you find this information helpful,
- expertlaw |
Clarification of Answer by
expertlaw-ga
on
08 May 2004 06:07 PDT
Dear italkfree,
Under those circumstances, while the bankruptcy court might not accept
your argument, you could attempt the argument that the alimony is not
necessary for the support of your wife, but was part of a larger
property settlement. You might also argue, if this was the case, that
the alimony was structured in that specific manner out of tax
considerations. Demonstrating the amount of property your ex-wife
received, along with her other sources of income as they relate to her
ability to support herself, might convince a court that the alimony
ordered was not in fact for purposes of support. You would then argue
that the second exception outlined above should be applied and the
alimony discharged.
It may also be possible to petition the court which ordered the
alimony to modify the award based upon lack of need and the changes in
your ability to pay. You may wish to have your divorce judgment
reviewed by a Florida family lawyer, to see if the alimony award would
be modifiable under state law.
- expertlaw
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