“Domestic support obligations” as defined by the U.S. Bankruptcy Code are generally exempt from discharge in bankruptcy. Therefore, child support or spousal maintenance generally cannot be discharged in bankruptcy and must be paid. The treatment of other types of awards that may be granted in a Texas divorce, however, may not be so clear. In a recent case, a former wife appealed a divorce decree that expressly stated that an award of attorney’s fees against her was a domestic support obligation pursuant to the U.S. Bankruptcy Code.
The parties got married in September 2021 and the wife filed for divorce that December. The husband subsequently filed a counterpetition, alleging adultery by the wife. He asked the court to order the wife to pay his attorney’s fees and costs and classify them as a domestic support obligation for purposes of bankruptcy.
The court granted the divorce based on adultery and awarded attorney’s fees to the husband. The court granted an award of $38,306 to the husband’s attorney and the firm. The divorce decree stated that the attorney’s fees would be “considered a domestic support obligation. . .”
The wife appealed, arguing the trial court erred in classifying the attorney’s fees award as a domestic support obligation under the Bankruptcy Code.
Domestic Support Obligation
11 U.S.C. § 523(a)(5) provides that “any debt . . . for a domestic support obligation” is exempt from discharge in bankruptcy. Such unsecured claims also receive priority. 11 U.S.C. § 507(a)(1). The Bankruptcy Code’s definition of “domestic support obligation” includes a debt in the nature of alimony, maintenance or support, regardless of whether it is expressly so designated, owed to a former spouse. 11 U.S.C. § 101(14A).
The mother argued that the judgment could not be classified as a domestic support obligation because she had been ordered to pay the attorney directly. Although the mother cited to case law, the appeals court noted that court have since held that an award to be paid directly to an attorney can be classified as a domestic support obligation.
The wife also argued the award could not be classified as a domestic support obligation because it was not related to alimony or custody. The appeals court also rejected this argument, noting that the attorney’s fees did not have to be directly related to alimony or a child custody matter to constitute a domestic support obligation under the Bankruptcy Code. The determination of whether an award of attorney’s fees can be classified as a domestic support obligation is based on the intent of the trial court.
The appeals court concluded that the trial court’s intent to make the award a domestic support obligation for bankruptcy purposes was clear because it was expressly stated in the divorce decree. Although the Bankruptcy Code provides that a domestic support obligation does not have to be so classified, the trial court doing so made its intent clear. Furthermore, since there was case law supporting such a classification, the appeals court could not conclude the trial court erred in classifying the award as a domestic support obligation.
The appeals court affirmed the judgment of the trial court.
Call an Experienced Family Law Attorney
If your marriage is ending, a skilled Texas divorce attorney can work with you to pursue a favorable result. Call McClure Law Group at 214.692.8200 for a consultation.