Are attorneys Fees ordered in my divorce dischargeable in Bankruptcy?
1) Even where the attorney’s fees are payable to a spouse, they must be pursuant to an award based on need before they are non-dischargeable. In re Gibson, 103 B.R. 218, 221 (9th Cir.BAP 1989).
2) Like all other exceptions to discharge, analysis under section 523(a)(5) begins with the principle that discharge is favored under the Bankruptcy Code and the party asserting nondischargeability has the burden of demonstrating that the obligation at issue is actually in the nature of alimony, maintenance or support. Norris v. Norris (In re Norris), 94 I.B.C.R. 233, 234 (Bankr. D. Idaho 1994) (citing Gard v. Gibson (In re Gibson), 103 B.R. 218, 220 (9th Cir. B.A.P. 1989)).
3) Whether an obligation is actually in the nature of support, and therefore non-dischargeable in bankruptcy, is determined under federal law. Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984). As a question of federal bankruptcy law, the Court is therefore compelled to look beyond the language of the divorce decree to the substance of the obligation to determine whether such an obligation is non-dischargeable. Id. This Court is not bound by labels applied to debts in a divorce decree by a state court for purposes of determining whether a debt is excepted from discharge. Id. Additionally, the Court must also consider that Section 523(a)(5) implements the “‘overriding public policy favoring the enforcement of familial obligations.'” Id.
4) “What constitutes support within the meaning of section 523(a)(5) implicates a number of factors that are potentially relevant on a case-by-case basis to this federal question.” Gionis v. Wayne (In re Gionis), 170 B.R. 675, 682 (9th Cir. B.A.P. 1994).