The plaintiff’s allegations of embezzlement with respect to a business debt the debtor, her ex-husband, owed to her were sufficient to withstand a motion to dismiss, where the plaintiff co-owned the business with the debtor and the debtor failed to comply with the family court’s order to set aside income from the business for the plaintiff. Bailey v. Bailey, No. 22-10013, Adv. Proc. No. 22-1001 (Bankr. E.D. Ky. Sept 26, 2022). Read More
Tag Archive: domestic support
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Embezzlement Claim Based on Divorce Decree Survives Motion to Dismiss
Posted by NCBRC - October 14th, 2022
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Employment Contract Is Domestic Support Obligation
Posted by NCBRC - April 13th, 2022
An employment contract between the debtor and his ex-spouse where the ex-spouse’s only responsibilities were to assist the debtor in family matters, was in the nature of domestic support and was entitled to priority treatment in the debtor’s chapter 7 bankruptcy. In re Wibracht, No. 21-50477 (Bankr. W.D. Tex. March 31, 2022). Read More
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Efforts to Collect Domestic Support Violates Automatic Stay
Posted by NCBRC - March 28th, 2022
An ex-husband’s efforts to collect medical expenses and a $50.00 direct payment ordered by the Family Court violated the automatic stay, where, unlike the debtor’s other domestic support obligations which he collected through wage garnishment, payment for the debts was not limited to non-estate property as required by the domestic support exception to the automatic stay. In re Dougherty-Kelsay, No. 19-8013 (B.A.P. 6th Cir. March 21, 2022).
The Sixth Circuit affirmed. Dougherty-Kelsay v. Kelsay (In re Dougherty-Kelsay), No. 22-5270 (6th Cir. Oct. 17, 2022) (unpublished).
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Debt to DHS Not Domestic Support Obligation
Posted by NCBRC - November 29th, 2017
A payment on a debt to the DHS based on an overpayment of food stamp benefits does not fall under the preferential transfer exception for domestic support obligations simply because the overpayment was made under a program for the support of the debtor’s children. Halbert v. Dimas (In re Halbert), No. 16-13005, Adv. Proc. No. 16-479 (Bankr. N.D. Ill. Nov. 16, 2017).
The DHS overpaid funds to the debtor, Tyeane Halbert, under its Supplemental Nutrition Assistance Program (“SNAP”). Within ninety days of Ms. Halbert’s bankruptcy petition, the DHS intercepted her tax refund to offset the debt based on the overpayment. Ms. Halbert sought to recover the refund under section 522(h) on the grounds that the transfer was a preference under section 547(b). The DHS argued that the payment fell under section 547(c)(7)’s exception to preferences for “domestic support obligations,” pointing to the definition of that term in section 101(14A)(ii) as a debt owed to a governmental unit which is “in the nature of . . . support.” Read More
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DOR Collection Violates Confirmation Order
Posted by NCBRC - August 17th, 2016
The Florida Department of Revenue violated the bankruptcy court’s confirmation order when it intercepted the debtor’s travel reimbursement funds for payment toward a domestic relations order. Florida Dept. of Rev.v. Gonzalez, No. 15-14804 (11th Cir. Aug. 11, 2016).
Irain Gonzalez’s confirmed chapter 13 plan provided for payment of his domestic support arrearages and for direct ongoing payments on that support obligation. Nonetheless, the Florida DOR intercepted his work-related travel reimbursement money and applied it to the support obligation. Mr. Gonzalez filed a motion for contempt due to the DOR’s contravention of the terms of the confirmed plan. During the contempt hearing the DOR agreed to release the funds and cease collection efforts. The bankruptcy court granted the motion for contempt and awarded attorney’s fees. In re Gonzalez, No. 11-23183-BKC-LMI, 2012 WL 2974813 (Bankr. S.D. Fla. July 20, 2012). The district court affirmed. In re Irain Gonzalez, No. 1:15-CV-20023-KAM, 2015 WL 5692561 (S.D. Fla. Sept. 29, 2015). Read More
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Discharge Injunction Does Not Apply to Domestic Support Obligation
Posted by NCBRC - June 28th, 2016
The Missouri Department of Social Services did not violate the discharge injunction by collecting on a debt that the bankruptcy court had deemed fully satisfied through the debtors’ successful completion of their chapter 13 plan. Missouri Dept. of Soc’l Serv. v. Spencer, No. 15-6030 (B.A.P. 8th Cir. June 13, 2016).
Michael and Patricia Spencer filed a chapter 13 bankruptcy petition in which they listed a domestic and child support debt owed by Mr. Spencer to his ex-spouse. The Missouri Division of Child Support Enforcement (Division) filed a proof of claim on behalf of Mr. Spencer’s ex-spouse in the amount of approximately $36,000.00. Upon discovering that it had miscalculated the domestic support debt, the Division amended the proof of claim to over $88,000.00. When the Spencers objected to the amended proof of claim the bankruptcy court held a hearing and found that the original proof of claim was the one that should be allowed. The Division did not appeal this decision or object to confirmation of the plan providing for repayment of the original claim, nor did it object to discharge upon the debtors’ successful completion of their plan. After the discharge order was entered, the Division filed a withholding order with Mr. Spencer’s employer to collect past-due domestic support. Mr. Spencer moved the bankruptcy court for an order of contempt and sanctions. The bankruptcy court the Division willfully violated the discharge order and awarded sanctions and attorney’s fees. Read More
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HAVEN Act Guide
The Honoring American Veterans in Extreme Need Act of 2019 (“HAVEN Act”) excludes certain benefits paid to veterans or their family members from the definition of current monthly income (“CMI”) found in the Bankruptcy Code. The HAVEN Act amends § 101(10A) of the Bankruptcy Code and supplements the 2005 amendments to the Code that excluded other government benefits, such as social security income.
This Guide provides an overview of the HAVEN Act identifies benefits that are excluded, and answers frequently asked questions.
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