Where’s My Refund? How to Address Overpaid Domestic Support Obligations under the Bankruptcy Code
Domestic support obligations are a source of much debate among bankruptcy courts throughout the United States. Concomitantly, overpayments of domestic support obligations are no exception. Courts across the nation are split as to whether overpayments of support debts fall within the definition of a domestic support obligation listed in 11 U.S.C. §101(14A). The specific language enumerated in §101(14A) giving rise to the jurisdictional split pertains to whether the debt in question is “in the nature of alimony, maintenance, or support.” Courts that deem overpaid support debts as domestic support obligations focus on the debt’s function at the time of the original agreement whereas other courts reject this approach and view the overpayment as a simple money judgment. This discrepancy has led to an inequity for families across the nation as jurisdictions throughout the United States produce distinctive interpretations of overpaid support debts. This Comment will specifically analyze overpaid domestic support obligations with reference to the 11 U.S.C. §507 list of priorities and §523 exceptions to discharge. In order to remedy the jurisdictional split, I propose a new set of standards for bankruptcy courts to follow when confronted with overpaid domestic support obligations. Instead of understanding child support and alimony collectively within the term domestic support obligation, I propose that the two obligations should be considered independently. The emerging standards include three main factors: (1) all domestic support obligations should be excepted from discharge, (2) the overpayment of child support should be entitled to priority status whereas (3) the overpayment of alimony should not. These standards are determined after analyzing the jurisdictional split, Congress’s intent in drafting the U.S. Bankruptcy Code, the substance of the obligation, and the intent and current condition of the parties. Exceptions to the standards arise when confronted with unique circumstances; however, this interpretation should be followed as a general rule.
Where’s My Refund? How to Address Overpaid Domestic Support Obligations under the Bankruptcy Code,
Emory Bankr. Dev. J.
Available at: https://scholarlycommons.law.emory.edu/ebdj/vol36/iss2/6