Domestic Support Obligations and Bankruptcy: An Analysis of Chapter 13 Filings

摘要

The law recognizes a variety of financial claims arising from the dissolution of domestic relationships. In some cases, these claims may force a debtor to file for personal bankruptcy. We examine Chapter 13 debtors that list domestic support obligations (DSO) on their Bankruptcy Schedule E, list of 11 U.S.C. §507 Priority claims, and we explore the usefulness of filing under Chapter 13 as a viable DSO debt management strategy. DSO include child support, alimony or payments under a property settlement agreement. Bankruptcy law establishes priorities, which provides the order in which claims are to be paid. DSO claims enjoy first priority under 11 U.S.C. §507. DSO are generally non-dischargeable (11 U.S.C. § 523(a)(5)). Individual state legislatures typically provide enhanced enforcement tools to assist collecting these debts.