Is husband’s bankruptcy filing a change in circumstances justifying a modification of spousal support?
While a husband’s discharge in bankruptcy may constitute a change in circumstances justifying a modification of spousal support in Virginia, the mere filing of husband’s bankruptcy and expectation of a discharge would be entirely too speculative for a modification. Rogers v. Rogers, 656 S.E.2d 436, 51 Va. App. 261 (Va. App. 2008). In the Rogers case, when the Virginia Circuit Court divorce judge entered a final decree of divorce, the husband and wife represented that they had settled all equitable distribution issues and reserved the issue of alimony or permanent spousal support for later determination. As part of the settlement, husband had agreed to pay two of the parties’ joint debts. The divorce court determined the amount of alimony or spousal support at a later hearing. The husband then filed a motion to reduce spousal support. The husband did not pay the joint debts as agreed and subsequently filed a chapter 7 bankruptcy. At the second hearing on alimony or spousal support, the divorce court judge assumed that the husband would receive a discharge of the joint debts in bankruptcy and that the creditors would pursue wife for collection of the debts. The divorce court judge used husband’s expected discharge to justify a modification of spousal support for wife.
After reviewing Virginia case law concerning spousal support in divorce cases and the discharge of debts in bankruptcy, the Virginia Court of Appeals recognized several rules. First, a court may not order a lump sum spousal support award to compensate a non-debtor spouse for the other spouse’s discharge of marital obligations in bankruptcy because that would re-create a debt discharged in bankruptcy and violate the preemption of Virginia state law by federal bankruptcy law. Rogers, 51 Va. App. at 269 (Va. App. 2008)(citing Mosley v. Mosley, 19 Va. App. at 197, 450 S.E.2d at 164 (1994). Second, where a material change in circumstances due to a bankruptcy otherwise occurs, a court may modify a spousal support order. Rogers, 51 Va. App. at 269 (Va. App. 2008)(citing Dickson v. Dickson, 23 Va. App. at 85-86, 474 S.E.2d at 171 (1996). Third, a spousal support award must have its basis in current circumstances. Rogers, 51 Va. App. at 270 (Va. App. 2008)(citing Poliquin v. Poliquin, 12 Va. App. at 676, 406 S.E.2d at 403-04 (1991). Finally, in modifying spousal support, a Virginia Circuit Court divorce judge may not base an award on speculation of future events, but may consider reasonable foreseeable events. Rogers, 51 Va. App. at 270 (Va. App. 2008)(citing Donell v. Donell, 20 Va. App. at 41, 455 S.E.2d at 258 (1995) and Srinivasan v. Srinivasan, 10 Va. App. at 735, 396 S.E.2d at 679 (1990).
In Rogers, the appeals court concluded that the divorce court erred in presuming husband would receive a discharge of the joint debts and in assuming that the creditors would pursue wife for collection. The appeals court remanded, or sent back, the case to the divorce court judge for further proceedings consistent with its decision.
You should consult with your bankruptcy or divorce lawyer regarding whether a bankruptcy might constitute a change in circumstances justifying a modification of spousal support or alimony.