Bankruptcy Considerations Should Be Part of Every Divorce Negotiation in Georgia
Legal Article GuideBy: Jonathan Ginsberg
The Georgia Supreme Court has ruled that a husband’s obligation to pay joint marital debt was wiped out in his bankruptcy. In the case of McGahee vs Rogers, a husband incurred tax debt when he cashed in a 401(k) early. Because Mr. McGahee and Ms. Rogers, then husband and wife, filed jointly, the resulting tax debt was a joint obligation.
The divorce decree between McGahee and Rogers clearly obligated Mr. McGahee to assume full and sole responsibility for this tax debt.
After the divorce was finalized, Mr. McGahee filed a bankruptcy and listed his ex-wife as a creditor, contending that his obligation under the divorce agreement to pay the tax debt was dischargeable in bankruptcy because it was not in the nature of “support or alimony.”
Ms. Rogers disagreed and filed a motion on Georgia Superior Court demanding that the Georgia Court hold her ex-husband in contempt for failing to pay the IRS. On appeal, the Georgia Supreme Court rejected Ms. Rogers’ Motion. The Court held that nothing in the divorce agreement provided that the IRS debt was “support or alimony” and therefore could be wiped out in the husband’s bankruptcy.
What This Means to You
If you are going through a divorce in Georgia and you have joint debt with your soon to be ex-spouse, you should clearly identify your spouse’s obligation to pay this joint debt as child support or alimony. Your Georgia divorce attorney can show you how to build a paper trail for this characterization that will hold up in court.
If your ex-spouse does file for bankruptcy, you should consult with a Georgia bankruptcy lawyer to learn about your rights to object to the bankruptcy discharge and to force your ex-spouse to live up to his divorce decree obligations.
Jonathan Ginsberg has practiced consumer bankruptcy law in Atlanta, Georgia for over 20 years. In addition to representing debtors in Chapter 7 and Chapter 13 bankruptcy cases, Jonathan serves as a continuing education instructor, assisting other lawyers learn about new bankruptcy law developments and practice management skills.
His consumer bankruptcy web sites include http://www.atlanta-bankruptcy-attorney.com and a consumer bankruptcy blog at http://www.thebklawyer.com/thebkblog/.
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