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Bankruptcy does not eliminate attorney’s fees owed to ex-spouse

On Behalf of | Sep 29, 2016 | Bankruptcy |

Divorced couples in Ohio who are considering bankruptcy may want to take note that a judge has ruled that the attorney’s fees a man owes his former spouse for overtrial are a domestic support obligation. Debt qualifies as a DSO if it is intended to support a child, spouse or ex-spouse of the debtor. Under bankruptcy law, a DSO is exempt from discharge and labeled as a priority. This means that the fees are considered priority must be paid in full in a Chapter 13 bankruptcy.

The man in this case has joint custody of his six children with his ex-wife. The pair became entwined in a lengthy court battle that involved child support, custody, health insurance and placement matters. Afterward, the judge direct the man to directly pay his former wife $25,000 in compensation for the extra legal fees she incurred because of his desire to control and win the proceedings. However, he never paid the money and filed bankruptcy.

Under Chapter 13, debtors may be relieved of debt but get to keep their property. They must develop a way to use their future earnings to repay a portion or all of their debts over three to five years.

The man in the above case claimed the attorney’s fees were dischargeable, and he appealed the decision when the bankruptcy court rejected his argument. In the appeal, he challenged that the attorney’s fees were not a DSO since he is paying them to his ex’s attorney, were not intended as support and were intended as punishment. The appeals court judge, however, concluded that the original intent of the award was financial support and upheld the bankruptcy court ruling.

Sometimes it is confusing to tell which debt may be discharged under certain bankruptcy laws. Debtors who are struggling and considering bankruptcy may ask attorneys for more information about eliminating debt through bankruptcy protection.


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