Old Domestic Dispute Resumes in Bankruptcy Case

Approximately ten years after these New Mexico residents concluded their divorce, and years of intervening enforcement battles in a New Mexico District Court, two former spouses continued their fight in federal bankruptcy court after the ex-wife filed for bankruptcy protection. When the two parties got their divorce in September 2004, the final order adjudged that each ex-spouse could claim only one of their two children as dependents for tax purposes each year. Over the next six years, the ex-husband (“Plaintiff”) took his ex-wife (“Defendant”) to court on 3 separate occasions to seek relief for unpaid medical expenses for the children in violation of their divorce decree, Defendant’s refusal to allow an inventory of her personal property and violation of the agreement on claiming one dependent only.

When the Defendant filed for bankruptcy (originally as a Chapter 7 case but converted to a Chapter 13 bankruptcy case) protection, the Plaintiff brought an adversary action against his ex-wife. He contended that, because of the three state court judgments he won against her since their divorce involved debts arising from their domestic cases, she is not entitled to discharge of such debts under § 523(a)(15) which excepts from discharge

any debt 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.

As these particular debts are distinguishable from domestic support obligations, such as a decree requiring child support payments, the Plaintiff did not request the debts be deemed non-dischargeable under § 523(a)(5) which addresses those specific types of debt.

The Plaintiff wanted to ensure that the amounts the ex-wife owed him under the 3 state court orders entered against the Defendant be excepted from discharge. The bankruptcy court determined it must, under the doctrine of issue preclusion, accept the state court’s determinations because previous courts had already rendered decisions on those matters. Accordingly, there was no issue as to whether these debts were valid but only if they were non-dischargeable. The bankruptcy court held that the clear language of § 523(a)(15) indicated they should not be discharged; therefore, the Defendant could not use the bankruptcy case to rid herself of these specific obligations although she could raise some issues as to the exact, current amount due as to some of the claims.

In Albuquerque, Giddens & Gatton Law, PC has attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases. The firm represents many debtors and creditors in New Mexico bankruptcy matters in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, PC at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, PC is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.