Source: https://thecarsonlawfirm.com/the-five-things-that-divorce-attorneys-must-know-about-bankruptcy/
Timestamp: 2019-04-18 14:42:36+00:00

Document:
Upon the filing of a bankruptcy petition, an automatic stay is entered pursuant to Section 362(a) of the Bankruptcy Code. This stay prevents the commencement of continuation of lawsuits against the debtor, and creditors cannot institute or continue collection efforts against the debtor.
(8)the commencement or continuation of a proceeding before the United States Tax Court concerning a tax liability of a debtor that is a corporation for a taxable period the bankruptcy court may determine or concerning the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief under this title.
Bankruptcy Courts liberally grant relief from stay in order to avoid entangling the federal court in family law matters. In re MacDonald, 755 F.2d. 715, 717 (9th Cir. 1985).
that if the debtor’s bankruptcy case is dismissed, the relief granted under the order lifting the stay will remain valid and effective without need for further order of the bankruptcy court in any subsequently filed bankruptcy case. The order should also provide that it will be binding on any future bankruptcy case. This, of course, assumes the family part action is pending at the time of refilling.
Chapter 7 – should obtain consent of the Bankruptcy Trustee – since it can involve property of the estate … NOTE: a Chapter 7 case is typically concluded in 90-100 days from the date of filing.
(a)A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— [for] ….
(15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law, by a governmental unit.
DIVORCE DEBTS ARE NO LONGER DISCHARGEABLE IN CHAPTER 7 CASES – PERIOD!!
See: Henderson v. Henderson, 389 S.W.3d 260, (Mo.App. E.D. 2012).
Several courts have held the “hold harmless and indemnify” language is no longer required. In re Shepard, Case No. 7-07-10497 SA. Adv. Pro. No. 07-1177s (Bankr. N.M. June 28, 2008). In re Wodark, BAP No. 09-049 (BAP 10th Cir. March 22, 2010); In re Burckhalter,389 B.R. 185 (Bankr. D. Colo. 20080.
HOLD HARMLESS AND OTHER LANGUAGE MAY STILL BE VALUABLE!!
In addition to “hold harmless and indemnify language” it may be advisable to recite that payment of certain debts are deemed to be in the nature of support, and to be considered non-dischargeable as a “domestic support obligation” in the event of a future bankruptcy.
Especially, if the debtor spouse later files for relief under Chapter 13.
The determination of whether a debt is “alimony, maintenance, or support” is a matter of federal bankruptcy law rather than state law. Jodoin v. Samayoa, 209 B.R. 132, 137-138 (BAP 9th Cir. 1997); In re Moeder, 220 B.R. 52, 54 (BAP 8th Cir. 1998); Colon v. Gallegos, 1998 WL 787194 (Bankr. N.D. IL 1998)(Squires, J.); Haas v. Haas, 129 B.R. 531, 536 (Bankr.N.D.IL 1989). In making this determination, the Court must look to the substance of the obligation and not to labels imposed by state law. But state law is not irrelevant and may provide relevant guidance. The bankruptcy court has the power and discretion to conduct an independent review of the divorce decree and factual inquiry into the true nature of any support. Jodoin v. Samayoa, 209 B.R. 132, 138 (BAP 9th Cir. 1997). The fundamental inquiry then becomes whether the intent of the divorce court and the ex-spouses was to provide support or divide marital property. In re Woods, 561 F.2d 27,29 (7th Cir. 1977); In re Moeder, 220 B.R. 52, 55 (BAP 8th Cir. 1998) (the crucial issue is the intent of the parties and the function the award was intended to serve at the time of the divorce); Colon v. Gallegos, 1998 WL 787194 (Bankr. N.D. IL 1998)(Squires, J.). In determining whether a debt is in the nature of support/maintenance or whether it is properly characterized as a division of property, courts have considered the following factors: whether the obligation terminates upon the death or remarriage of either spouse (termination of the obligation indicates the obligation was for support); whether the obligation is payable in a lump sum or in installments over a period of time (obligation spread over time indicates the obligation was for support); whether the payments attempt to balance the parties’ income (payments to balance income indicate the payments were for support); the characterization of the obligation in the divorce decree (obligations described as support indicate the obligation was for support); the placement of the obligation in the decree (obligations under the heading support indicate the obligation was for support); whether there is any mention of support payments (separate mention of support payments indicates the obligation is not for support); whether there are children who need support (if children are of the age when support is required, this indicates the payments may be for support); whether there is a large differential in net income (a large differential in income would indicate the payments were for support); whether the obligation was thought to be taxable to the recipient (payments thought to be taxable indicate the payments were for support); and waivers of maintenance. See In re Woods, 561 F.2d 27, 29-30 (7th Cir. 1977); Colon v. Gallegos, 1998 WL 787194 (Bankr. N.D. IL 1998)(Squires, J.).
(2) of the kind specified in section 507(a)(8)(C) or in paragraph (1) (B), (C), (2), (3), (4), (5), (8) or (9) of Section 523(a).
BANKRUPTCY COURT IS NOT BOUND BY LABELS, HOWEVER THEY CAN MEAN A LOT.
Domestic Support Obligation under 11 U.S.C. 523(a)(5) and NOT DISCHARGEABLE in Chapter 13 OR, whether it is Property Division Debt under 11 U.S.C. 523 (a) (15) and, therefore, DISCHARGEABLE in Chapter 13.
Whether the Other Party is (or was) in Need of Support from the Debtor. If so, the debt is more likely a support obligation.
Does the obligation terminate upon Death, Remarriage or Emancipation of a Child. If so, it is more likely to be deemed a Support Obligation.
The Number of Payments. Smaller payments over time tend to be deemed support obligations, whereas a lump sum payment is more likely considered a Property Division debt.

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