A law firm had represented a wife in a divorce proceeding. At the conclusion of the divorce case, the divorce court entered an order awarding the ex-wife $85,000 in attorney fees and directed the debtor/husband to pay the attorney fees directly to the ex-wife’s law firm.
Debtor/husband did not pay the attorney fees; instead, he filed a chapter 7 bankruptcy case and received a chapter 7 discharge. In response, the law firm filed an adversary proceeding against debtor/husband and sought an order excepting the $85,000 attorney fee debt from discharge. Clair, Griefer LLP v. Prensky, 416 B.R. 406 (Bankr. D.N.J. 2009).
The issue before the Prensky court was whether attorney fees awarded to debtor’s ex-wife, but payable directly to the ex-wife’s law firm, are dischargeable under §523(a)(15). Debtor/husband asserted that the attorney fee debt was dischargeable because the debt was not a debt owed to a “spouse, former spouse or child” as required for non-dischargeability under §523(a)(15). Debtor/husband urged the court to adopt a “plain language” interpretation of the §523(a)(15) clause “spouse, former spouse, or child” and find the attorney fee debt dischargeable because the debt was payable to the law firm and not to the spouse, former spouse, or child.
The Prensky court rejected debtor’s argument. The court found that the $85,000 attorney fees were divorce-related debt incurred by debtor in the course of the divorce proceedings between the debtor and ex-wife and were thus non-dischargeable pursuant to §523(a)(15). Key to the court’s decision was the fact that the divorce court awarded attorney fees to the ex-wife, not to the law firm. The court noted that, pursuant to the divorce order, the attorney fee debt was owed to the ex-wife but payment was ordered to be made directly to the ex-wife’s law firm. The court further commented that state law gave the ex-wife the legal right to enforce the award of attorney fees in the event the legal fees were n not paid. In short, the court believed that the attorney fee debt was owed to a “spouse, former spouse, or child” as required by §523(a)(15) and that the divorce order directing the payment to be made directly by debtor to the law firm had not changed the fact that the debt was still owed to a “spouse, former spouse, or child.”
Warmest Regards,
Bob Schaller
Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.
Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.
I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.
For information about Chapter 7 bankruptcy Click Here
For information about Chapter 13 bankruptcy Click Here
You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.
NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.
I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.
Thursday, December 31, 2009
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment