Divorce Obligations and Bankruptcy Discharge: Rethinking the Support/Property Distinction

The Bankruptcy Code currently divides divorce-related obligations into two categories: awards or agreements in the nature of support are non-dischargeable; obligations arising from property divisions can be discharged in the same manner as ordinary commercial debts. Because recent developments in family law have undermined the support/property distinction and because privately negotiated divorce agreements often fail to distinguish between payments intended to serve as support and those intended to distribute property, the Code's reliance on this classification often leads to confusion and hardship for divorce obligees. In addition, because of the rise of equitable distribution as the dominant method of allocating marital gains and losses, the policy of refusing to protect divorce-related property divisions is unfair to divorcing couples who structure their financial arrangements according to modern notions of marital partnership. Tracing the history of the marital support exemption and examining recent trends in family law, Professor Singer argues that the goals of bankruptcy law and divorce law could be better served by amending the Bankruptcy Code to exclude from discharge all divorce-related obligations. Such a rule would recognize the particular nature of financial commitments arising out of marriage, and allow the Code to conform with our modern understanding of the marriage relationship.