Saturday, January 21, 2017

Mortgage payments cannon be discharged in a bankruptcy, when deeply interconnected with family support obligations.

In my consumer bankruptcy practice, I often encounter questions regarding the dischargeability of financial obligations. A person on the phone or face-to-face, usually at the first meeting or case evaluation, wants me to draw a quick conclusion and tell from a simplified fact pattern, if the debt is dischargeable or not. I am often pressed to decline a quick answer, unless I am presented with a full set of all relevant fact.

Just like in the case below, I was asked to research, if a mortgage obligation could be discharged, when a couple specifically agreed in the preceding divorce to maintain a house, to make the mortgage payments, and to allow their teenage kids to live there and attend their school district. I came across the case from the Bankruptcy Court in the Western District of Pennsylvania that addressed my issue head-on. Obligations to make mortgage payments and to pay child support coupled with physical placement of child in mortgaged property make the payments of the mortgage a non-dischargeable domestic support obligations. In re Price, No 15-07012-JAD, 2015 WL 9957177 (Bankr. W.D. Pa. Oct. 5, 2015)

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