Prior to the 2005 amendments to the Bankruptcy Code (also known as the BAPCPA), there existed a well-settled body of authority regarding the intersection of bankruptcy law and state divorce law, including which debts were dischargeable or nondischargeable, regardless of whether the debts were categorized as “support” debts or “property settlement” debts. In 2005, the BAPCPA modified numerous Bankruptcy Code provisions, changing the law and the debtor-creditor balance relative to several domestic relations-bankruptcy issues. In general, and similar to support obligations, property settlement provisions in state court divorce judgments are now almost always nondischargeable. Further, the time limitation previously imposed to file an action, to determine whether a property settlement is dischargeable or not, and the prior requirement that the action be decided only by the bankruptcy court, have been eliminated.

The U.S. Bankruptcy Court for the Western District of Michigan was recently called upon to explore several of these issues in In re Randall Lewis.  Any bankruptcy lawyer who is dealing with domestic support issues should read the opinion in its entirety, as it addresses a number of issues related to domestic support obligations.  In short, the court found that the dischargeability of a particular domestic support obligation will typically turn upon orders entered by the state court which has jurisdiction over the matter; "[w]ith limited exceptions, there is no longer any reason for this bankruptcy court to continue to be involved in the divorce and domestic relations proceedings. This court is unable, pursuant to the domestic relations exception to federal jurisdiction to dissolve a marriage or determine spousal or child support (if any)."  Regarding the division of marital property, the court in In re Randall Lewis held that "it will almost always be appropriate for a bankruptcy court to abstain. "  Finally, the bankruptcy court noted that Michigan courts have concurrent jurisdiction over non-dischargeable debt issues per § 523(a)(5) (support obligations) or § 523(a)(15) (property settlement obligations).

Although some domestic support obligations can be tricky, one thing is clear: alimony and child support obligations will not be dischargeable in a Chapter 7 bankruptcy.  If you are considering bankruptcy and have questions about domestic support issues, contact a bankruptcy attorney in your jurisdiction.

-Drew Broaddus