Discharge of divorce-related debts – Insolvency/Bankruptcy

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Subsection (15) of Section 523(a) was added to the Bankruptcy Code in the Bankruptcy Reform Act of 1994 to extend the exception of Section 523(a)(5) to release from marital debts. Section 523(a)(15) provides that an individual is not released from any debt:

(15) to a spouse, ex-spouse or child of the debtor and not of the type described in subsection (5) [related to domestic support obligations like
child support or alimony] that is incurred by the debtor in connection with a divorce or separation or pursuant to a separation agreement, divorce decree or other order of a court of record, or a decision made under the law of a state or territory by a governmental unit.

Basically, subsection (15) renders non-dischargeable all divorce-related debts other than alimony, alimony, and child support, which are already non-dischargeable under 523(a)(5).

If your spouse declares bankruptcy and seeks to discharge an obligation created by a divorce decree or other separation agreement, it may be necessary for you to file an adversarial proceeding to have that debt designated as non-dischargeable under section 523(a)(15). Otherwise, this debt could be discharged. Do not assume that completing bankruptcy will be enough.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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