Florida residents who are interested in obtaining a bankruptcy discharge may want to know of a recent ruling in a spousal support case. A man who was ordered to pay his ex-wife’s attorney’s fees has lost his appeal of the court’s decision. The man had declared bankruptcy and objected to the order to make the $25,000 payment to his ex-wife’s attorney, but the court rejected his argument.
The divorce case was lengthy, and the man was ordered to pay his ex-wife’s attorney for “overtrial.” He was told to make the payment directly to the attorney, but he then filed for chapter 13 bankruptcy and appealed the court’s decision. He objected to the ruling to pay the attorney rather than his ex-wife and argued that the payment was intended as punishment and not spousal support. The U.S. Appeals Court for the Seventh Circuit determined that the payment was intended as support and stated that spousal support or domestic support obligation cannot be discharged in bankruptcy and must be paid.
The couple has legal joint custody of their six children. Child custody, child support, and health insurance were all issues that contributed to the length of the divorce proceedings. The Seventh Circuit concluded that the $25,000 attorney’s fee was due to the man’s desire to “control” the divorce litigation.
A Chapter 7 Bankruptcy discharge eliminates all debt except that which is exempt from discharge.
Bankruptcy for consumers generally comes in two flavors: Chapter 7 and Chapter 13. While Chapter 7 discharges all debt except that which is exempt from discharge, such as spousal support and federal student loans, Chapter 13 involves paying off debt on a payment plan for a certain number of years, after which remaining debt is discharged. Certain conditions must be met in order for someone to qualify for Chapter 7 bankruptcy. Someone who does not qualify for chapter 7 could file for chapter 13.