Friday, May 8, 2015

Bankruptcy Discharge of Divorce Attorneys Fees

One spouse of often ordered to pay the attorney fees of the other spouse in a divorce.  In some cases, this obligation is dischargeable in bankruptcy.  In this question, it should be noted that there are some differences in the provisions in chapter 7 and chapter 13 bankruptcy.

"Domestic Support Obligations" are generally not dischargeable in bankruptcy. The issue then is whether the involved attorney fee is sufficiently related to a nondischargeable DSO so as to make it also a nondischargeable DSO.

In order to be a DSO, the claim generally must be
  1. owed to a spouse, former spouse, or child of the debtor, or such child's parent or guardian
  2. be in the nature of alimony, maintenance or support
  3. established or subject to establishment by reason of a separation agreement, divorce decree, or property settlement agreement or by court order
  4. not assigned to a nongovernmental entity unless voluntarily assigned for purposes of collection