Property Settlement and New Laws
My ex was ordered to pay the mortgage in the divorce-he did not. I was suing him for contempt when he filed ch. 7. It is my understanding of the new laws that debts a person is ordered to pay in a divorce are now automatically nondischargeable. But, my attorney is saying we have to litigate which of course will cost me thousands of dollars. I thought the laws were changed to prevent this, so I'm confused.
Re: property settlement and new laws
Taking your post at face value it would seem that he would need to list the mortgage as a priority claim as a "Domestic Support Obligation".
Quote:
(14A) The term “domestic support obligation” means a debt that accrues before, on, or after the date of the order for relief in a case under this title, including interest that accrues on that debt as provided under
applicable nonbankruptcy law notwithstanding any other provision of this title, that is—
(C) established or subject to establishment before, on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of—
(i) a separation agreement, divorce decree, or property settlement agreement;
Domestic support obligations are not dischargeable.
Have you seen a copy of his petition and if so, is the debt listed as priority?
If not, you will likely need to file some type of objection or show up at the 341 meeting, if it hasn't already taken place.
Re: property settlement and new laws
My attorney filed an objection to discharge. His attorney replied saying he didn't agree. So, now my attorney is saying we have to litigate. I don't agree. I'm not sure of the process of a ch. 7 and I haven't seen my ex's petition. Shouldn't the mortgage debt been deemed nondischargeable by his attorney or the trustee already? I don't agree with my attorney that I should have to spend thousands of dollars fighting this when the divorce decree is very specific about his obligation to the mortgage.
Can you tell me where you got the information from your quote?
Re: property settlement and new laws
The divorce decree reads that I kept the house in the divorce but my ex husband could remain in the house as long as he kept the mortgage current. When he moved out he was responsible for 1/2. Needless to say, he didn't pay the mortgage when he lived there, forcing the house in to foreclosure, and hasn't given me 1/2 since moving out.
I found the information online and the way I read it is that property settlements are now considered domestic support obligations and are automatically nondischargeable. I don't think I should have even had to file an objection to discharge, let alone litigate. I don't agree with my attorney about this issue.
Any more info on this matter would be greatly appreciated.
Re: Property Settlement and New Laws
What I quoted are edited lines from the bankruptcy code. Cornell.edu has the code available online but I don't believe it is updated with the "new" changes.
Your problem may be that his petition lists the debt as an unsecured claim rather than priority. Then it would be up to you (and your attorney) to prove otherwise.
See his bankruptcy petition or more specifically his schedules to see where the mortgage debt is listed. Your atty should have a copy.