There are many things related to family law that you cannot avoid paying by declaring bankruptcy. These include child support, alimony, or anything else paid to your spouse, ex-spouse, or child that is “in the nature of” support. In one recent case, though, a federal bankruptcy court ruled that a father could discharge as part of a Chapter 7 bankruptcy case his portion of the fee owed to a psychological professional for a court-ordered psychological evaluation of the father’s child as part of the parents’ custody litigation. Bankruptcy covered the debt because it was not owed to or recoverable by either the child or the man’s ex-wife.
The prolonged path to this ruling began with a divorce judgment. That ruling ended the marriage of E.W. (mother) and M.H. (father). The couple had one minor child. As a part of the litigation of custody and child support, M.F. was appointed by the court to evaluate the couple’s child. As part of this process, the couple agreed to split the cost of M.F.’s evaluation 50-50. M.F. eventually billed $8,000 for his work.
The mother paid her $4,000; the father paid nothing. M.W. pursued a collection judgment, in which the final order demanded that the father pay the $4,000, plus $2,450 in attorneys’ fees. Instead of paying, the father sought to discharge the full $6,450 debt as part of his filing for Chapter 7 bankruptcy. M.F. filed what’s known as an “adversary proceeding,” which is a separate legal action within a bankruptcy case in which someone, such as a creditor, challenges some aspect of the bankruptcy, such as the dischargeability of a particular debt. Here, M.F. claimed that the father was not allowed to use bankruptcy to avoid paying the $6,450 he owed.
The bankruptcy court in this case disagreed with M.F. and dismissed his adversary proceeding. The bankruptcy judge ruled that the law only prevents the discharge of a debt like this if it meets certain specific criteria. The debt has to be (1) “owed to or recoverable by … a spouse, former spouse, or child of the debtor,” (2) “in the nature of alimony, maintenance, or support” of that spouse, former spouse, or child, and (3) established by a valid court order.
In the father’s case, while the debt satisfied the second and third criteria, it did not satisfy the first factor. The debt at issue was one that the father clearly did not owe to his ex-wife or to his child. A debt can still satisfy this criterion if the other spouse could become liable for the unpaid debt or if the court took into account the spouses’ relative financial circumstances in apportioning responsibility for the evaluator’s bill. In this case, the evidence seemed clear that the 50-50 split of M.F.’s bill was the result of a voluntary fee-sharing arrangement between the spouses and involved no judicial consideration of the spouses’ respective financial statuses. Additionally, based on M.F.’s lawsuit filing, E.W. did not, and does not, have any responsibility to pay the unpaid balance on M.F.’s bill. As a result, the debt could not meet the first criterion and must be considered dischargeable in bankruptcy.
The outcome in the father’s favor raises some pertinent lessons about addressing these types of situations in the future. Based on this opinion, it appeared that there were ways that the M.F.’s evaluation debt could have been made non-dischargeable in bankruptcy. If the document governing the payment of the evaluator’s bill had discussed each of M.H.’s and E.W.’s financial situations, or if it had made the spouses jointly and severally liable for paying the entire bill, the obligation likely would have satisfied all three criteria and not been something that could be wiped out in bankruptcy.
A child custody case be a short and straightforward matter or protracted and complex. Regardless of whether your custody case is more likely to be the former or the latter, you need an experienced Florida family law attorney on your side. The diligent South Florida child custody attorneys at Sandy T. Fox, P.A. have the skills and knowledge you need to give you the representation you deserve. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.
More blog posts:
Miami Divorce Lawyer Sandy T. Fox, Esquire Achieves Board Certification In Family Trial Law By The National Board of Trial Advocacy, Fort Lauderdale Divorce Lawyer Blog, June 24, 2016
The Amount Of Sexual Partners For Women And The Impact On Divorce, Fort Lauderdale Divorce Lawyer Blog, June 6, 2016