441 B.R. 752
Bankr. M.D.N.C.2011Background
- Debtor Patricia D. Clark and Larry Clark, Sr. divorced January 28, 2008; pursuant to a 2009 divorce judgment, Debtor was to pay Mr. Clark a distributive award of $104,500 in monthly installments of $800 beginning May 1, 2009, and continuing until paid.
- Divorce action was dismissed on November 30, 2009.
- Debtor filed Chapter 13 on September 23, 2010, having made partial payments totaling $1,200 to Mr. Clark.
- On October 26, 2010, Mr. Clark filed a proof of claim for the remaining balance, claiming priority as a domestic support obligation.
- Debtor objected, contending the claim arises from equitable distribution, not a DSO; Clark argued the payments are alimony with priority under §507(a)(1)(A).
- The court must determine whether the underlying obligation is a DSO under 11 U.S.C. §101(14A) and §523(a)(5)/(15), and whether Clark’s claim is entitled to priority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Clark's claim is a domestic support obligation. | Clark seeks priority as a DSO. | Debtor asserts the obligation is an equitable distribution award, not a DSO. | The claim is not a DSO; it is part of equitable distribution. |
Key Cases Cited
- In re Deberry, 429 B.R. 532 (Bankr.M.D.N.C.2010) (DSOs receive enhanced protection in bankruptcy)
- In re Johnson, 397 B.R. 289 (Bankr.M.D.N.C.2008) (DSOs may be priority in Chapter 13; distinguishing equitable distribution)
- In re Catron, 164 B.R. 912 (E.D.Va.1994) (burden on claimant to prove DSO status)