Case Summary:
Debtor filed a voluntary Chapter 7 petition on July 18, 2016. The Trustee entered a Final Report on December 20, 2016. Creditor Lakeview Care Partners objected to the Trustee’s Final Report seeking a Court Order to disapprove the report and require the Trustee to pursue collection of its debt from the Debtor’s ex-spouse. Lakeview argued the debt was nondischargeable under 11 U.S.C. § 523(a)(15). Pursuant to a marital settlement agreement, the Debtor’s ex-spouse was assigned the Lakeview debt. The ex-spouse filed bankruptcy on December 29, 2016. She received a discharge of her Lakeview debt on April 25, 2016. The instant Debtor also listed Lakeview as a creditor on his Schedules. The Court held the debt to Lakeview was dischargeable. The ex-spouse incurred a “new debt” when the state court granted the marital settlement agreement. Her debt to Lakeview was discharged with her bankruptcy. Similarly, when the Debtor received a discharge, his liability on that same debt was also discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(5) -- Nondischargeability – Divorce Decrees
11 U.S.C. § 523(a)(15) -- Nondischargeability – Marital Obligations

Key Terms:
Marital Settlement Agreement
Nondischargeable Debt