Could wife reopen her bankruptcy case in the Eastern District of Virginia to add her husband’s attorney as a creditor?
Yes under a former local procedure, although it would not make any difference was the holding of the bankruptcy judge in the unpublished case of In re Cintron, Case No: 00-60937-T (EDVA 2001) Cintron debt discharged without scheduling. In the Cintron case, wife filed a chapter 7 bankruptcy case in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. The wife received a chapter 7 discharge and the case was closed. In accordance with a now repealed Local Rule 1009-1(C) of the Local Rules of Bankruptcy Procedure, wife filed a notice (which the judge treated as a motion) to add her husband’s attorney as a creditor. Under Federal Bankruptcy Rule 9029, each federal district can make and amend local rules that are consistent with the federal bankruptcy rules. In the course of the parties’ divorce case, wife had been ordered by the state court divorce judge to pay her husband’s attorney’s fees in a decree, as is permitted by Virginia Code Sections 20-79, and 20-99. The local bankruptcy rule in effect at the time of the Cintron case allowed debtors to add previously unscheduled creditors in a closed bankruptcy case. The bankruptcy court judge noted that the local rule served two purposes, to give debtors a way to schedule unscheduled creditors and to persuade previously unscheduled creditors that their claims were discharged. The judge noted that re-opening a case to add a previously unscheduled creditor had no real effect on the dischargeability of a debt. Section 523(a)(3) of the Bankruptcy Code provides that a debt which requires the filing of a complaint to determine dischargeability, such as a debt based on use of a false financial statement, fraud, defalcation in a fiduciary capacity, larceny, embezzlement, or an intentional injury to another person or another person’s property, is not discharged if the debt was not scheduled or listed in time to file such a complaint, unless the creditor has timely, actual knowledge of the case. Otherwise, a dischargeable debt will be discharged even though the debt or claim was not scheduled by the debtor. There is no time limit to determine the dischargeability of a family law debt. One that is dischargeable would be discharged, regardless of whether it was scheduled, and one that is not dischargeable would not be discharged.
In Citron, the judge recognized that (under the version of Section 523(a)(5) in effect at that time) if the attorney’s fees owed to the husband were in the nature of support, they would not be discharged in any event. [Under today’s law, the relevant inquiry would be whether the attorney’s fees were a domestic support obligation nondischargeable under Section 523(a)(5) or a nonsupport family law debt that fits under Section 523(a)(15). Both the Virginia Circuit Courts and the U.S. Bankruptcy Court for the Eastern District of Virginia can hear these family law nondischargeability matters – they have “concurrent jurisdiction”, regardless of whether the case was reopened. In Citron, the judge overruled the husband’s objection to re-opening the case to add the husband’s attorney as a creditor, but noted that it would not make any difference in the outcome. The comments to the current Local Bankruptcy Rule 1009-1 address the repeal of the previous subsection as follows: “Paragraph (C) has been removed as it no longer conforms to applicable case law on this subject.”
You should consult with your Virginia family law lawyer or bankruptcy attorney to discuss whether your particular family law debt can be discharged.