Case Summary:
Debtors received a Chapter 7 discharge of their debt, which included money owed to the Wisconsin Department of Children and Families (“DCF”) for overpayment of FoodShare benefits. Debtor Muhammad provided inaccurate information, resulting in DCF overpaying her $5,520.92 in benefits for her and her grandson. DCF intercepted Debtors’ tax return to satisfy part of the overpayment. Debtors moved to hold DCF in contempt and recover the tax intercept. DCF asserted the overpayments were nondischargeable under 11 U.S.C. § 523(a)(5). The Court held the overpayment was dischargeable because the debt was not a domestic support obligation as defined by 11 U.S.C. § 101(14A). The Court applied the Ninth Circuit’s reading of section 101, which requires the debt be tied to a “government’s family support infrastructure” rather than any money from the government. The DCF debt was not a domestic support obligation under section 101 because it was incurred to support her grandchild, not her child. The statute does not include grandchildren and Debtor did not have a legal duty to financially support her grandson. Thus, section 523(a)(5) did not apply and the debt was dischargeable. The Court held the DCF intercept violated the discharge injunction and ordered DCF to immediately release and refund the tax intercept to Debtors. 

Statute/Rule References:
11 U.S.C. § 101(14A) -- Definition of "Domestic Support Obligation"
11 U.S.C. § 106 -- Waiver of Sovereign Immunity
11 U.S.C. § 523(a)(5) -- Nondischargeability - Domestic Support Obligation

Key Terms:
Discharge Injunction
Dischargeability
Domestic Support Obligation