Bankruptcy

Are Legal Fees For Visitation Cases Protected As DSOs?

By Wendell Sherk, Missouri Attorney

Bankruptcy law generally prevents the discharge of a debt that is in the nature of support (like child support or alimony) as a “domestic support obligation.”  This principle has been extended to protect legal fees charged to an opposing party during litigation over these issues as well.  What about legal fees over a visitation fight?

An Oklahoma district court judge doesn’t think so.  In this case, the grandparents of a child had sued to obtain visitation from the mother.  They ultimately were ordered to pay the mother’s legal fees and eventually had to file bankruptcy and the mother objected to those fees being discharged in bankruptcy.

Judge Joe Heaton of Western Oklahoma agreed with the bankruptcy court in discharging the debt.  Judge Heaton pointed out that the 2005 amendments to the Bankruptcy Code expanded the list of protected creditors from only spouse, former spouse or child of the debtor to include “legal guardian or responsible relative.”  But distressingly (to lawyers) absent from the amendment are the words “or their lawyer.”  Although many courts had expanded the pre-2005 language to include the lawyers for such parties (in part because the benefit of paying the lawyer went to the protected party), Heaton pointed out that Congress seemed to be emphasizing there is a protected group of beneficiaries and trying to make it clear courts should not ignore this part of the test.

Heaton also pointed out that even if “attorney for” is read into the law, as prior cases did, those cases normally related to core disputes about caring for a child or former spouse — like custody or financial support.  In this case, grandparent visitation would not necessarily impact support for the child and therefore would not be as intimately related to the support aspect of a “domestic support obligation.”

It remains to be seen if Judge Heaton’s nuanced reasoning will gain traction.  But it provides some welcome food for thought on an emotionally-charged aspect of bankruptcy law.

The case is Tucker v. Oliver (In re Oliver), 2010 WL 125575 (WD.Okla. 2010)

Full post as published by Bankruptcy Law Network on February 26, 2010 (boomark / email).