What Happens to Divorce Debts in Bankruptcy?

Debts in the nature of support of child or former spouse are not discharged in either chapter 7 or 13 bankruptcy.

What about property settlement debts?  If the divorce decree contains a hold harmless obligation that makes one spouse indemnify the other spouse, then the hold harmess oglibation is a separate debt to the spouse and is not dischargeable in chapter 7 bankruptcy 523(a)(5) or 523(a)(15).

The hold harmless obligations can be discharged in chapter 13 bankruptcy as long as the debt to the former spouse not a Domestic Support Obligation (DSO).  This is possible because property settlement debts under 523(a)(15) are not excepted from discharge in chapter 13 cases.  See Schuett v. Finkey, 2008 Bankr. Lexis 1555 (Bankr. D. Neb. May 21, 2008).

Pay Child Support or Lose Your Professional License in Kansas


When a person who holds any kind of professional license or certification in Kansas owes past due child support equal to or greater than three months of child support and has failed, after reasonable opportunity, to comply with any payment plan, 2009 HB 2201 mandates that the court order noticesent to the support debtor’s licensing body. In the case of an attorney, the court is required to file a complaint with the disciplinary administrator in this state and/or any other state in which the attorney is licensed.

Once the licensing body gets notice, it must notify the support debtor within 30 days that it will suspend or withhold issuance or renewal of debtor’s license. It can then issue a temporary license that is good for up to 6 months to give the debtor a chance to comply. The sixth months can be extended an additional 30 days upon a showing of extreme hardship. The licensing body has no jurisdiction over anything related to the debt. Upon compliance, the license would be reinstated or renewed.

New Kansas Chapter 13 Bankruptcy Discharge Procedure Proposed

A new procedure for issuing chapter 13 bankruptcy discharges and administratively closing the cases is being considered in the U.S. Bankruptcy Court for the District of Kansas.  Here is a summary of the procedure from the minutes of the September 17, 2008, Bench and Bar Committee:

  • About six months before anticipated plan completion the Chapter 13 Trustees will file a Notice of Plan Approaching Completion.
  • If no Financial Management Certificate has been filed by Debtors, the Court’s case management computer software (CM/ECF) will send a notice to Debtor and Debtor(s)’ counsel reminding them that the Financial Management Certificate must be filed prior to making the last payment in a Chapter 13 plan. [Read more…]
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