Where a Virginia divorce court judge orders husband to pay a certain amount of support per month, decreasing each year for three years total, is this lump sum alimony payable in deferred payments or a periodic payment subject to modification by husband’s bankruptcy discharge of an equitable distribution award to wife?

Where a Virginia divorce court judge orders husband to pay a certain amount of support per month, decreasing each year for three years total, is this lump sum alimony payable in deferred payments or a periodic payment subject to modification by husband’s bankruptcy discharge of an equitable distribution award to wife?

In Dickson v Dickson , the Virginia Court of Appeals ruled that the award of spousal support was a periodic payment award subject to modification upon a change in circumstances such as husband’s bankruptcy discharge of the equitable distribution award to wife.

The final decree of divorce entered in husband and wife’s divorce case provided for support, equitable distribution and attorney’s fees and costs.  The decree provided that husband would pay to wife a fixed monthly amount of support for three years, with decreases to lower fixed monthly amounts in each of last two years.  After entry of the divorce decree, husband filed a chapter 7 bankruptcy case and discharged over $620,000 in debt, including the equitable distribution award to wife.  The wife filed a petition to increase support based on a material change in circumstances, the bankruptcy discharge.  The husband responded by filing a petition to decrease support.  The Virginia trial court judge ordered husband to pay spousal support at the rate specified for the third year of the prior award to wife indefinitely until the death of either party or the remarriage of wife, subject to future modification.  The husband appealed the modification of support to the Virginia Court of Appeals.

On appeal, the husband contended that the trial court did not have jurisdiction to modify the award pursuant to Code Section 20-109 because it was a lump sum award.  Virginia Code Section 20-109 provides that upon the “petition of either party the court may increase, decrease, or terminate the amount or duration of any spousal support and maintenance that may thereafter accrue, whether previously or hereafter awarded, as the circumstances may make proper.”

The Virginia Court of Appeals ruled in favor of the wife.  The court noted that the final decree did not establish a final amount of support payable, even though a final amount could be calculated from the face of the decree.  The court also relied on the fact that the divorce court judge did not find special circumstances or compelling reasons requiring a lump sum payment.  In addition, the decree expressly characterized the support as a periodic payment.  Finally, the husband had applied for a modification of support himself, and would not be allowed to take contradictory and inconsistent positions.

The husband also contended that the discharge in bankruptcy was not a change in circumstances warranting a change in support.  The Virginia Court of Appeals noted that the trial court judge relied on the fact that wife would not receive the equitable distribution award that she had expected, an important factor in deciding on the amount of support under Section 20-107.1 (E)(8) of the Code of Virginia.  As this was a case of first impression, the Virginia Court of Appeals looked to case law from other jurisdictions, including Siragusa v. Siragusa, 843 P.2d 807 (Nev. 1992), from the Nevada Supreme Court, which recognized the tension between the federal supremacy clause and the equitable interests of the state in not allowing one spouse to deprive the other of marital property.  While the purpose of bankruptcy is to provide a fresh start to an honest debtor, the state has an even greater interest in resolving domestic disputes.  The Virginia Court of Appeals adopted the majority position that the discharge in bankruptcy was a change in circumstances justifying a modification of support, although the amount of alimony should not be a substitute for the amount discharged in bankruptcy.  The court noted that although husband’s income had decreased, his overall financial condition had improved following the discharge in bankruptcy as he still owned a vacation beach condo and a $50,000 matched asset plan while the wife was unemployed and without health insurance, and had nearly exhausted her retirement account.  The trial court’s decision was not plainly wrong or without evidence to support it.

You should consult with your Virginia bankruptcy or divorce lawyer to determine if your former spouse’s bankruptcy justifies a modification of support.

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