Divorce can be a war of attrition. The family court often requires the husband to pay the wife’s counsel fees, which could be $10,000 or higher. This can definitely take a toll on someone’s morale and pocket.
It’s common to hear about ex-husbands filing for bankruptcy after a divorce is over, and often the husband will list the wife’s lawyer fees as a debt on his bankruptcy schedules. Consequently, lawyer’s fees as a dis-chargeable debt in bankruptcy become a big issue. The key question is whether the counsel fee debt is declared as a support obligation or property settlement claim.
The California Bankruptcy Court recently declared obligation to pay spousal support and attorney fees as non-dischargeable pursuant to 11 U.S.C. §523(a)(5). Van Aken v. Van Aken, 2005 Fed. App.0001 (6th Cir. 2005).
If an ex-husband attempts to discharge a counsel fee award, it is imperative that the wife files an adversary proceeding with the Bankruptcy Court. This request calls for a Court hearing over the dispute, and the Court decides whether the counsel fee award is support and non-dischargeable. Likewise, the Bankruptcy Court could determine the counsel fee award was a form of equitable distribution that can be discharged. The Court could also order the payment terms be restructured. It is important to note that if a non-debtor spouse ignores a spouse’s bankruptcy filing, disastrous results could ensure. No objection typically means the debtor spouse will successfully discharge a counsel fee obligation. Call us for help with bankruptcy after divorce.