Abstract

Bankruptcy has long had unique implications for divorce settlements and debts between ex-spouses. Historically, some marital debts owed from one ex-spouse to another were excepted from the traditional policy of "discharge. " Bankruptcy law distinguished between debts in the nature of alimony, maintenance, and support, which were protected from discharge, and property division debts, which were not. This distinction often had harsh consequences for creditor ex-spouses. Reeently, Congress enacted the Bankruptcy Reform Act of 1994, in part to ameliorate this problem. The amended Bankruptcy Code providP..s better protection for some property division debts. In this Note, Ms. Johnson argues that the new amendments, while certainly a conscientious enhancement of the Bankruptcy Code's previously inadequate protection for marital debts, are in need of clarification. She locates several problems in these new amendments, and recommends specific guidelines to the National Bankruptcy Review Commission. Ms. Johnson canvasses legal commentary on the new legislation and suroeys contemporary case law to demonstrate that myriad difficulties exist in the application of the new section 523(a)(15)(B) "balancing test" created lly the Reform Act. She argues that the test encourages excessive flexibility and subjectivity. The "balancing" function is performed with varying degrees of success, and some courts have tended to uphold discharge notwithstanding the possibility of bankruptcy for the creditor ex-spouse. Al5o, nUr merous splits of authority have emerged. Ms. Johnson recommends specific guidelines to clari.fj section 523(a)(15)(B). These standards would remedy current problems of opacity, lack of uniformity, and subjectivity. Implementation of these guidelines would give bankruptcy judges better direction in applying the balancing test, while more effectively realizing Congress's goal: greater protection for marital debts.

Document Type

Article

Publication Date

1997

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