Trustee Could Not Pursue Claim Against Ex-Spouse under a Marital Settlement Agreement Where Debtor and Ex-Spouse Filed Separate Cases to Discharge the Debt

Trustee Could Not Pursue Claim Against Ex-Spouse under a Marital Settlement Agreement Where Debtor and Ex-Spouse Filed Separate Cases to Discharge the Debt

On July 18, 2016, the Debtor commenced the instant bankruptcy case by filing a voluntary petition under chapter 7 of the Bankruptcy Code. He received a discharge on February 13, 2017. The Trustee filed a Final Report on December 20, 2016. Creditor, filed an objection to the Final Report. Creditor  asks the Court to disapprove the Final Report and require the Trustee to pursue collection of the amount of the Creditor debt from Debtor’s ex-wife, on the ground it is excepted from discharge pursuant to 11 U.S.C. § 523(a)(15) as a debt assigned to ex-wife by the terms of the parties’ Marital Settlement Agreement (“MSA”).

Debtor’s ex-wife petitioned for dissolution of her marriage to the Debtor on February 17, 2012. A Judgment of Divorce incorporating the provisions of the MSA was entered on March 17, 2014. The MSA assigned responsibility for the Creditor’s debt to ex-wife. On February 25, 2015, Creditor  filed suit against ex-wife and the Debtor claiming the sum of $101,362.50 for services provided to the Debtor in 2012 and 2013. The state court  granted a judgment against the Debtor and his ex-wife, jointly and severally.

Ex-wife filed bankruptcy on December 29, 2016. She received a discharge on April 25, 2016; she listed Creditor and its claim was discharged in her case.

Despite the discharges of the debt to Creditor, it argues the Trustee should pursue collection from ex-wife. Its argument is based on the theory that since responsibility for payment was assigned to ex-wife by the MSA, it is a nondischargeable debt owed to a former spouse and the Trustee should be required to step into the shoes of the debtor to enforce the MSA and collect the amount of the  judgment from her.

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