A lot of the clients that come in to our office have not only experienced a loss of a job, illness or disability, but many times they are in the process of either getting a divorce or have already gone through a divorce or separation. Many clients find themselves with a huge debt from attorneys fees that were awarded by the judge in a divorce or separation agreement. What are you options if you are faced with a large debt from attorneys fees that were awarded to your ex-wife or ex-husband. Can you get rid of this debt by just filing for bankruptcy?
The answer very much depends on what these fees are awarded for. Domestic support obligations are considered non dischargeable debts in bankruptcy . Debts that are awarded in order to provide support for children or alimony payments to your ex-spouse will not be eliminated in bankruptcy. If the attorney’s fees are in the nature of a support obligation then you cannot eliminate them in either a Chapter 7 or Chapter 13 bankruptcy.
If the attorney’s fees that were awarded are in the nature of a property settlement agreement, where it is used to offset certain assets awarded to you then you may be able to eliminate the debt at part of a Chapter 13 bankruptcy . Chapter 7 bankruptcy will not eliminate attorney’s fees that were awarded as part of your divorce or separation agreement that are a property settlement. Only Chapter 13 bankruptcy can eliminate debts from a divorce or separation agreement that arose from a property settlement agreement.
Generally attorney’s fees awarded as part of a divorce or separation agreement are not alimony or support payments, but rather a property settlement agreement. The key to determining whether you can discharge the debt in a bankruptcy is to determine whether this debt is a support obligation or a property settlement. A court may look toward items such as whether there was a need for a support obligation and other items to determine what type of debt this was.
If you are considering filing for bankruptcy and have attorney’s fee debt from a divorce, then it is important that you consult first with a family law attorney who can provide you with a better understanding of what type of debt this is. It is also important to keep in mind that if you don’t have the assets or income to pay this debt, then it may not be worth it for your ex-partner to consider pursuing you for this award. It is a waste of time and money to pursue the collection of a debt where it is clear there is no income or assets to pay the debt with.