Q: I live in North Georgia and I got divorced and have huge legal fees that I owe my divorce lawyer. Can they be discharged in bankruptcy?
A: Yes, family law and divorce fees can be discharged in bankruptcy. People have the absolute legal right to discharge in bankruptcy all dischargeable legal fees. Chapter 7 of the U.S. Bankruptcy Code provides the basic procedure to give "debtors" a fresh start in life by wiping-out the accumulated debt loads. Upon filing a Chapter 7 petition, debtors generally will be discharged from credit card debts (Visa, MasterCard, American Express), car loans (Ford, Chevrolet, Chrysler, BMW, Mercedes, Toyota, Honda), mortgage loans (Bank of America, Sun Trust), medical (Northside Hospital, Scottish Rite, Emory, Grady, Kennestone) and other debts. Thereafter, debtors have no further obligation to pay these debts and creditors are stopped from enforcing claims.
However, not all debts are dischargeable. Under the Bankruptcy Code some attempted discharges can denied. However, an attack on dischargeability of certain debts must be made by filing an adversary proceeding in the U.S. Bankruptcy Court for the Northern
District of Georgia within the narrow time constraints allotted for objection.
There is, however, an exception to the dischargeability of divorce-related debt. That is if the debt is found to be "alimony, maintenance, or support" it will not be discharged. That determination is a matter of federal bankruptcy law rather than state law. A bankruptcy court will make the determination. To do that, the Court must look to the substance of the obligation and not to labels used by state law or the attorneys involved. State law, though, may provide relevant guidance. The bankruptcy court has the power and discretion to conduct an independent review of the divorce decree and make its own factual inquiry into the exact nature of any support.