Legal Question in Bankruptcy in California

My spouse and I have reached an agreement in our divorce, which calls for ending spousal support as of September 26, the date of the agreement. As money is being withheld from my pay and there is a backlog of things being recorded at the courthouse, she is to return any excess money received within two days. $4828 excess was withheld on September 30, and she has not returned any, despite my asking her to honor the agreement. I have not yet received a copy of the filed agreement, and am concerned that another $4828 will be withheld from my next paycheck. She has stated that she intends to file bankruptcy. Would she be able to discharge this debt under Chapter 13? It seems that, as she is aware that she is not entitled to the money and has agreed to immediately return it, it should be considered to be obtained fraudulently and not dischargeable. My divorce lawyer does not seem to be clear on it, however.


Asked on 10/13/11, 4:29 pm

2 Answer from Attorneys
Tony Carballo Carballo Law Offices

I don't think that her holding the money is fraudulent since she did not acquire the money by fraud. She is in breach of the agreement to return the money for sure. She might be able to discharge that debt. You do have the right to sue her in bankruptcy and contest the dischargeability of that debt and argue that it is fraudulent. I don't think you will win and the amount involved might not be worthwhile but you need to consult with a bankrutpcy attorney who needs to review the settlement agreement and ask you for additional facts. You might also claim that she is holding the money for you in trust. Talk to a bankrutpcy attorney. Your divorce attorney will not know about bankruptcy unless he or she also handles bankrutpcy cases. If another $4,828 is withheld after she files then the debt for that money would not be dischargeable in bankruptcy. Your should have obtained a stipulated order from the judge when you settled ordering your employer to stop withholdings for support immediately.

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Answered on 10/13/11, 6:25 pm


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