Skip to Content

In a California dissolution action, does a debt need to be directly payable between spouses to be non-dischargable in bankruptcy


It is a standard rule that support orders as well as debts between spouses that are ste forth in a judgment for dissolution of marriage are non-dischargable in bankruptcy court. The principle behind this rule is to prevent unfair settlements whereby one spouse will accept responsibility of more of the community debts to offset his/her obligation to pay attorney’s fees, acquire more community assets or to reduce his/her support obligation only to later discharge the debt in bankruptcy. This issue was raised in the marriage of Vaughn 29 Cal App 5th 451 (11/27/18). In this case, the parties had a partnership whereby the husband owed an outstanding debt to the family partnership - in which his former wife was a limited partner. After the judgment for dissolution of marriage was finalized, the husband attempted to ddischarge the ddebt owed to the partnership in the bankruptcy court. The Court found that the loan was non-dischargeable in bankruptcy. The trial court concluded that the debt did not have to be directly payable to the wife to fall under the exemption set forth in 11 USC 523(a)(15). The Court determined that 11 USC 523(a)(15)'s language is ambiguous, and should be interpreted broadly.

Share To: