Dischargeability of Divorce-Related Debts

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Gregory W. Mitchell

Gregory W. Mitchell

Attorney

214.984.3410
gmitchell@freemanlaw.com

Gregory Mitchell joins Freeman Law to lead its bankruptcy practice. Mr. Mitchell is a native of the Dallas area, graduating from Southern Methodist University with a Bachelor’s Degree in Economics in 1991 and with his J.D. in 1994. In 1995, he obtained an LL.M. in Taxation from New York University. Mr. Mitchell currently directs the SMU Dedman School of Law’s federal taxpayer clinic. Mr. Mitchell’s background in tax makes him a natural fit for Freeman Law.

Prior to joining Freeman Law, Mr. Mitchell was the managing partner of The Mitchell Law Firm, L.P., a small firm he started in 2004, where he ran a diverse practice primarily focused on bankruptcy, tax and related litigation matters.

Prior to starting his own firm, Mr. Mitchell served as a Partner and General Counsel with Tax Automation, L.P., a national tax consulting firm. Mr. Mitchell was previously the National Director of Tax Technology at Ryan & Company, a national tax consulting practice, as well as a Senior Manager with KPMG, a “Big Four” accounting firm.

Dischargeability of Divorce-Related Debts

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

(15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) [related to domestic support obligations like child support or alimony] 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.

Basically, subsection (15) makes nondischargeable all divorce-related debts other than alimony, maintenance, and child support, which are already nondischargeable pursuant to 523(a)(5).

If your spouse files for bankruptcy and is seeking to discharge an obligation created by a divorce decree or other separation agreement, it may be necessary for you to file an adversary proceeding to have that debt designated as non-dischargeable under Section 523(a)(15).  Otherwise, that debt might be discharged.  Don’t assume that it will simply carry through the bankruptcy.