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community obligations assigned to debtor & filing Ch. 13.
Dennis and Jim say dischargeable in a 13 if it falls under (a)(15), David
says non-dischargeable. So is it a division of marital property or a DSO?
My 2 cents: Assignment of cc debt with right of indemnity is found in the
family code in 2620-2628, which is under Part 5- Division of Property.
Unless the jmt in the FL court characterizes it as support, is will be
presumed to be an (a)(15) obligation.
It is also important to advise ones client that the FL court is a court of
equity which can order spousal support to be paid or increased to offset
the unequal division of property which resulted from the discharge in
bankruptcy.
E.g. Larry Leader and Freda Follower met many years ago at dance class where
they immediately hit it off both on and off the dance floor. They were soon
married and have been dancing happily ever since. Unfortunately, Larry
has developed an obsession with dancing and has run up numerous credit card
debts to pay for his dance lessons. While Freda has known about the lessons
and the cc debts and has personally benefited from Larrys smooth moves on
the dance floor, she now realizes they cant pay the debt and Larry wonstop taking lessons.
When Larry returns from Austria where he has been taking private lessons in
the Viennese Waltz, she serves him with divorce papers. They decide that
they dont want an acrimonious divorce, so they each hire attorneys
experienced in collaborative law. They have $100K in assets and $50k in
joint cc debt. In the stipulated division of property, Larry gets 75k in
assets and is ordered to pay all of the 50k debt, while Freda gets 25k in
assets and no debt. As he is now single, Larry then blows $1k on more dance
lessons, then goes to the cdcbaa website where he finds a plethora of
capable bk attys. He finds that Richard Discharge is the one closest to his
home. He calls Richard who says he cant see him that afternoon due to a
doctors appt., but sets up a consultation for the next day. Richard
advises Larry that he will be unable to discharge the debts in ch 7, but can
do so in a 13. Larry pay Richard $4k to handle his bk. The plan shows that
Larry will be able to pay only enough through the plan to pay off 10k, but
Richard advises him that the rest will be discharged once the plan has been
completed. Larry is ecstatic as he waltzes out of Richards office to yet
another dance lesson which he pays for with the property settlement which
was exempted under the wild card. He starts making payments through the
plan, but the west coast creditors swing into action immediately to begin
dunning Freda for the payments. Eventually, after the dust has settled,
Freda ends up paying much of the discharged debt. She returns to her
divorce atty, who advises her that the collaborative law contract does not
allow her to represent her in an adversarial action in the FL court, but
sends her next door to another FL lawyer who will represent her in the FL
court. An OSC to increase spousal support is filed. Despite his protests to
Judge Bullwinkle that Fredas financial injuries are only a scratch and that
he will make them better when he is able, (which he advises the court will
be sometime after his rocky financial period ends) the judge decides that he
has heard that song and dance before and concludes that Larry has
inequitably stepped on Fredas toes. Larry Leader finds his bankruptcy
triumph followed by a big deduction being taken out of his check to pay the
new spousal support order. The orders duration makes it look like Larry
will be paying support to Freda for a long time. Freda takes her monthly
check from Larry and gets more dance lessons for herself while Larry is
reduced to watching Dancing With The Stars and brooding over his misfortune.
One summer night when he is attending a free outside dance at the Music
Center, he dances with a woman named Petra Plaintiffscounsel. They enjoy
each other immensely on the dance floor. Larry tells her his tale of woe
regarding his bk and subsequent support payments and its chilling effect on
his dance skills acquisition. Petra advises Larry that he may have a cause
of action against Richard, who she remembers from law school as a real drip.
Larry gladly follows her to her office where she draws up a complaint
against Richard, in which he is accused of falling below the standard of
care in the discharge of his duties and leading Larry down the primrose
path. The next day a foxy process server trots up to Richards door where
she unceremoniously drops the summons and complaints in his lap. Poor
Richard thereafter takes a ride on the E & O. From that he learns the lesson
that neither a leader or a follower should one be, nor represent anyone who
claims to be either.
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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See 11 U.S.C. 1328(a)(2). You can only discharge it in a 13.
avidTilem@TilemLaw.com
Sent: Friday, May 09, 2008 8:08 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] community obligations assigned to debtor & filing Ch. 13.
The obligation to indemnify wife is NOT dischargeable even if the primary obligation to the credit card company is discharged.
Sent from my BlackBerry wireless device
Date: Fri, 9 May 2008 15:25:27
To:consumer bk group
Subject: [cdcbaa] community obligations assigned to debtor & filing Ch. 13.
Debtor was assigned to pay a large credit card debt in his divorce judgment . Am I correct that this does not fall under the exceptions to discharge listed in section 1328(a) and thatdebtor, husband, can file a 36 month chapter 13 since his income is below the median, and he can simply pay a low percentage of the debt, since that is all he can afford?The next wrinkle in this scenario is that the judgment was never signed or entered since although there was a trial and petitioner's (wife) attorney was ordered to submit the judgment to court, she did not do so and husband's (respondent's ) attorney refuses to do so , since he has not been paid.
Pat Said.
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The post was migrated from Yahoo.
depends if the court ordered the payment in the nature
of support, or if the court ordered the payment as an
equalization of community obligations, first is
support, nondischargeable, second can be discounted in
a 13.
be careful, there are cases which say a minute order
is an order.
dennis
> Debtor was assigned to pay a large credit card debt
> in his divorce judgment . Am I correct that this
> does not fall under the exceptions to discharge
> listed in section 1328(a) and thatdebtor, husband,
> can file a 36 month chapter 13 since his income
> is below the median, and he can simply pay a low
> percentage of the debt, since that is all he can
> afford?
> The next wrinkle in this scenario is that the
> judgment was never signed or entered since although
> there was a trial and petitioner's (wife) attorney
> was ordered to submit the judgment to court, she
> did not do so and husband's (respondent's )
> attorney refuses to do so , since he has not been
> paid.
> Pat Said.
>
>
>
>
The post was migrated from Yahoo.
Debtor was assigned to pay a large credit card debt in his divorce judgment . Am I correct that this does not fall under the exceptions to discharge listed in section 1328(a) and thatdebtor, husband, can file a 36 month chapter 13 since his income is below the median, and he can simply pay a low percentage of the debt, since that is all he can afford?The next wrinkle in this scenario is that the judgment was never signed or entered since although there was a trial and petitioner's (wife) attorney was ordered to submit the judgment to court, she did not do so and husband's (respondent's ) attorney refuses to do so , since he has not been paid.
Pat Said.
The post was migrated from Yahoo.