There is no question that alimony and child support obligations awarded by a New Jersey judge in a divorce case are not dischargeable in bankruptcy. However, what happens when the spouse ordered to pay the support obligation is also ordered to pay the attorney's fees incurred by his or her spouse in obtaining that award? Unfortunately, the answer is, "It depends."
Why is There No Clear Answer?
The reason why there is no clear answer is because the bankruptcy code does not specifically say one way or the other; it has been left to the courts to make that determination. It does not even help that the order to pay attorney's fees does not specifically state whether the award was for the purposes of support. The law says that the fees can be a support obligation "without regard to whether such debt is expressly so designated."
What does this mean to you? It means that if your ex-spouse goes into bankruptcy court and claims that the attorney's fee award was for support, the judge will look into the facts of the case surrounding the family court judge's ruling to determine whether the debt can be discharged. It does not matter that the state court judge did not SAY it was for support in his or her order; it still CAN be.
So What Should I Do?
This is not to say that bankruptcy judges will second-guess the state court judge; they generally rely on his or her findings. For this reason, if you are thinking about bankruptcy at all you should discuss it with your divorce attorney so as to avoid as best you can findings by the family court judge that the attorney fee award is needed for support, whether or not that language ever makes it into an order or other written finding.
If you live in southern New Jersey and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you are looking for more information on how bankruptcy might help you with your divorce, then you should download my free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy.