A Florida Circuit Court order required one party in a divorce to pay the other’s attorney’s fees and further ruled that the fee award was not dischargeable in bankruptcy. In a recent ruling, the Third District Court of Appeals reversed that lower court decision stating that the law does not allow a state court to decide the federal issue of discharge prior to the filing of any bankruptcy proceeding. The court explained that the problem with the state court’s judgment is that it reached an issue of federal law that is not yet ripe for consideration. A state court is free to place language in a judgment to memorialize factual determinations or legal rulings on questions of state law that may later assist a bankruptcy court in deciding, as a matter of federal law, the dischargeability of obligations created by the judgment.
It is not uncommon in my family law practice in Volusia and Flagler Counties to see lawyers placing ” bankruptcy non-dischargeability clauses” in marital settlement agreements and settlement stipulations. Whether the financial obligation is child support, alimony or an monetary award as part of equitable distribution of marital assets and liabilities, these clauses are not binding on federal bankruptcy courts. Generally speaking, if the monetary award is one of alimony or child support, the bankruptcy court will not discharge it. If, on the other hand, the award involves payment of money or a debt as part of property distribution, then the obligation may very well be discharged in bankruptcy.
I’ve been specializing in divorce, dissolution of marriage and family law for 40 years. If you or your spouse is considering a divorce, you can contact me at my Daytona Beach office at 386-257-1222 or PaulRice@RiceLawFlorida.com<mailto:PaulRice@RiceLawFlorida.com>. I’ll be glad to answer your questions and let you know where you stand in the event your marriage may be coming to an end. We offer appointments in office, by phone or via zoom. The choice is yours.
Paul E. Rice, Jr., Esquire
Board Certified in Divorce & Family Law
Florida Supreme Court Certified Family Law Mediator