Bankruptcy and Divorce
BY: William R.F. Conners
Managing Partner and Founder
Spousal and child support debts are not subject to discharge (forgiven) in bankruptcy. However, other debts owed from the bankrupt spouse to the other may be discharged. Consider a Virginia case where the Husband in chapter 13 bankruptcy still owned the Wife child support arrearages, but not a substantial lump sum payment on a home equity line of credit that he owed to the wife per their property settlement agreement. The lump sum payment was not characterized as a domestic support obligation, but rather as an agreement on the division of a marital debt.