Bankruptcy

Discharges And QDROs

By L. Jed Berliner, Springfield & Marlborough, MA Ban

QDRO:  That nasty Qualified Domestic Relations Order that divvies-up a pension after a divorce.

Bankruptcy:  That other nasty procedure that may, or may not, get rid of all your debts.

Okay, listen up.  No bankruptcy can get rid of a family support order.  Chapter 7 cannot discharge a property division ordered by a divorce court, but Chapter 13 can.

So, is a QDRO a property division ordered by a divorce court?  Maybe.  It depends on your timing.

My experience is that there’s a couple of months after the divorce court orders the parties to execute a QDRO and process it, but before all that actually happens.  After it happens, the rights to the pension are written in stone (we call them present interests) and cannot be changed.  But before the QDRO is signed by all parties, then approved by the divorce judge, and then processed by the pension administrator – before all that happens, there may be a window of opportunity here.  An opportunity to discharge the obligation to sign the QDRO and present it to the pension administrator.  An opportunity.  A possible opportunity.

Full post as published by Bankruptcy Law Network on March 19, 2010 (boomark / email).