Howard v. Howard

Howard v. Howard

336 S.W.3d 433 (Ky. 2011)

Roy Shane Howard and Sondra Howard. Trial Court divided parties marital property and debts assigning Shane liability for a National City loan on the parties’ Dodge Durango. Shane successfully filed in fed court a bankruptcy petition for Chapter 7 discharge.

Sought to reduced child support obligation, claiming health problems, inability to find work and the bankruptcy he received. Sondra found he was in contempt of court for failure to pay the debt on the repossessed Durango. Appeal as with bankruptcy. Appeals court found that under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which does not discharge the debtor from any debt “to a spouse, former spouse or child” for something other than a domestic support obligation.” Shane appealed.

As the Court of Appeals states, Shane had the obligation under the divorce decree but the issue whether this debt would not be subject to discharge under the requirements of 11 U.S.C. section 523(a)(15) as a debt to Sondra under the divorce decree. They found that the obligation did indeed meet the rquirements and that Sondra was not required to file anything in bankruptcy court regarding the Chapter 7 filing in order to preserve her right to enforce in state court of Shane’s obligation to her under the divorce decree.

The Court ended up finding that while the debtor’s obligation on an underlying debt to a third-party creditor may be discharged because that underlying debt was not to a spouse or former spouse or child, the weight of authority holds that a separate, otherwise enforceable, obligation under a divorce decree to make payments on a third-party debt is not dischargeable in Chapter 7 bankruptcy following the BAPCPA amendments.