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Bankruptcy Discharge Of Marital Debt

On Behalf of | Jan 28, 2013 | Bankruptcy, Divorce & Family

In a Final Divorce Decree, a family court may order the parties split a marital debt. For example, a family court may order that each party pay 50% of a joint tax debt. Such an order does not, however, prevent one party from seeking to discharge their obligations in bankruptcy. In the case of Mason and Mason, the wife attempted to do exactly that; discharge her obligation to pay 50% of a joint federal tax debt. While the wife was successful in convincing the bankruptcy court that she be allowed to discharge her obligation under the Divorce Decree to pay half of the debt, the New Hampshire Supreme Court disagreed. On November 28, 2012, the Supreme Court held that the joint tax debt was non-dischargeable under bankruptcy law and therefore the wife’s bankruptcy discharge did not impact her obligation under the Divorce Decree.

With the economic downturn, post-divorce attempts to discharge an obligation to pay marital debt are becoming more common. It is imperative that a person who receives notice that their ex-spouse has filed for bankruptcy protection speak with an attorney immediately to determine whether the debts the ex-spouse is attempting to discharge impacts that ex-spouse’s obligations under a Divorce Decree.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at [email protected].