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  1. #1
    Join Date
    Oct 2012
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    9

    Default Can You Get a Divorce Property Settlement Discharged in Bankruptcy

    My question involves bankruptcy in the state of: Indiana
    My exes divorce decree speaks to a property settlement in lieu of a pension settlement which due to the nature of my job is a state pension and private pension. In the decree it is labeled as a property settlement to be paid in a lump jump over a ten year period. A letter was sent to my ex to notifiy her the property settlement would be null and void once the bankruptcy is complete. No response was given from her by the standard 21 day time frame. Will she have a defense that she never received the letter or since she failed to notify the court of ther change of address is this big OOPS on her?

  2. #2
    Join Date
    Oct 2006
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    14,499

    Default Re: Creditor Failed to Change Address

    Quote Quoting julbox3134
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    My question involves bankruptcy in the state of: Indiana
    My exes divorce decree speaks to a property settlement in lieu of a pension settlement which due to the nature of my job is a state pension and private pension. In the decree it is labeled as a property settlement to be paid in a lump jump over a ten year period. A letter was sent to my ex to notifiy her the property settlement would be null and void once the bankruptcy is complete. No response was given from her by the standard 21 day time frame. Will she have a defense that she never received the letter or since she failed to notify the court of ther change of address is this big OOPS on her?
    Yes, of course that could be a possible defense. Its also not necessarily an oops on her part at all if you knew she did not live at that address anymore.

    However, there is another thing for you to consider. The property settlement that you came to, giving her a lump sum in lieu of a pension settlement, was just that, in lieu. If you discharge that lump sum in bankruptcy, then she would have every right to reopen the divorce case and have you instructed to pay out her share of the pension monthly, as you receive it, once you retire.

  3. #3
    Join Date
    Mar 2013
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    15,925

    Default Re: Creditor Failed to Change Address

    Quote Quoting julbox3134
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    the property settlement would be null and void once the bankruptcy is complete.
    Think again.

    According to the US Bankruptcy Code you cannot discharge a "domestic support obligation":

    https://www.law.cornell.edu/uscode/text/11/523

    Which is defined as:

    https://www.law.cornell.edu/definiti...II:section:523

    Note that the definition includes property settlement.

  4. #4
    Join Date
    Sep 2010
    Posts
    462

    Default Re: Creditor Failed to Change Address

    AJ.

    It's a bit more complicated than just referencing the non-dischargeability of a DSO.

    OP was very particular with the words used to describe the debt: "property settlement".

    OP then stated that the settlement was "in lieu of a pension settlement", not support.

    If, as I suspect is the case, a Chapter 13 was filed, the property settlement was discharged, unless there was/is a finding that the property settlement was "in the nature of support". If such a finding exists the claim would be reclassifying to a DSO and would not be subject to a discharge.

    Lastly, property settlements arising from a divorce decree or settlement agreement are covered under 523(a)(15) not 523(a)(5) which covers DSOs. Matters covered by (a)(15) are dischargeable in Chapter 13 only,hence the reason I suspect that is what we are dealing with.

    Des.

  5. #5
    Join Date
    Sep 2005
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    98,536

    Default Re: Creditor Failed to Change Address

    The conceit here seems to be that if your ex- does not update a divorce court with her new address on what would appear to be a closed divorce case, you can play games with a bankruptcy filing with the intention of trying to avoid giving her actual notice of your intention to try to get part of the divorce settlement discharged in bankruptcy.

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