NJ & CT News

The parties entered into a prenuptial agreement in 2000, two days before their marriage. It stated, among other things, that “[u]pon the Termination of Marriage,” the husband would provide to the wife certain property settlements, and that the wife was “aware that these payments are not alimony and will not be tax deductible.” It further stated that the wife “has been fully advised and understands that by signing this Agreement, she is giving up rights in the other Spouse's property and income that might otherwise be available under law. ' These rights include ' the right to alimony and to equitable distribution a division of property. ' Each of the parties hereby agrees to accept the terms of this Agreement in place of, and instead of those rights that would be available through operation of the law in the absence of this Agreement.”

The parties divorced. Later, the husband sought bankruptcy protection, prompting the plaintiff wife to seek a court's declaration that the debts owed to her by her former husband were non-dischargeable pursuant to 11 U.S.C. ' 523(a)(5) (domestic support obligations are non-dischargeable in bankruptcy) or 11 U.S.C. ' 523(a)(15) (a debt incurred in the course of divorce or separation is non-dischargeable in bankruptcy if it is incurred by operation of law or is memorialized in an agreement, court order, etc.).

The wife asserted that the parties intended that the payments provided for in the document were meant for her support. The court here agreed, relying on federal bankruptcy case law (In re Langman, 465 B.R. 395 (Bankr. D.N.J.20. 12)) to go beyond the plain language of the agreement to conclude that the payments provided for therein were incurred in connection with a divorce and were intended to be for the ex-wife's support. As such, they were not dischargeable in bankruptcy.

CONNECTICUT

Suit Challenges State's Alimony Law on Constitutional Grounds

On Nov. 7, 2013, four anonymous plaintiffs from different judicial districts around Connecticut filed a constitutional challenge to the State's alimony laws, saying they affect a “fundamental liberty interest in ending a marriage and in remarrying.” Although the laws have been challenged before, this appears to be the first constitutional argument on the subject advanced in the courts. The complaint alleges that the concept of alimony is outdated, and that the lack of guidance for judges means that payors can be unfairly deprived of their funds. “In no other area of law is the judiciary cast adrift and empowered to force the transfer of a private citizen's assets with no stated goal against which to measure the appropriateness of the award,” the plaintiffs say. The legislature attempted in 2012 to come up with an income-based formula for determining alimony, but the proposal soon died. The issue may come up for discussion again, however, after the legislature receives the results of a study on the subject now being undertaken by a task force created by the Judiciary Committee. The report is expected to be turned in to the legislature in February.

NEW JERSEY

Pre-Nup Says Payments Are Not Alimony: Bankruptcy Court Disagrees

A Bankruptcy Court in New Jersey has found that although a divorced couple's prenuptial agreement styled payments to the wife post-divorce as something other than payments of alimony or divorce-related obligations, they were indeed divorce-related, making them debts that could not be discharged in bankruptcy. DeStefano v. DeStefano, 2013 Bankr. LEXIS 4764 (Bankr. D.N.J. 11/6/13).

The parties entered into a prenuptial agreement in 2000, two days before their marriage. It stated, among other things, that “[u]pon the Termination of Marriage,” the husband would provide to the wife certain property settlements, and that the wife was “aware that these payments are not alimony and will not be tax deductible.” It further stated that the wife “has been fully advised and understands that by signing this Agreement, she is giving up rights in the other Spouse's property and income that might otherwise be available under law. ' These rights include ' the right to alimony and to equitable distribution a division of property. ' Each of the parties hereby agrees to accept the terms of this Agreement in place of, and instead of those rights that would be available through operation of the law in the absence of this Agreement.”

The parties divorced. Later, the husband sought bankruptcy protection, prompting the plaintiff wife to seek a court's declaration that the debts owed to her by her former husband were non-dischargeable pursuant to 11 U.S.C. ' 523(a)(5) (domestic support obligations are non-dischargeable in bankruptcy) or 11 U.S.C. ' 523(a)(15) (a debt incurred in the course of divorce or separation is non-dischargeable in bankruptcy if it is incurred by operation of law or is memorialized in an agreement, court order, etc.).

The wife asserted that the parties intended that the payments provided for in the document were meant for her support. The court here agreed, relying on federal bankruptcy case law (In re Langman, 465 B.R. 395 (Bankr. D.N.J.20. 12)) to go beyond the plain language of the agreement to conclude that the payments provided for therein were incurred in connection with a divorce and were intended to be for the ex-wife's support. As such, they were not dischargeable in bankruptcy.

CONNECTICUT

Suit Challenges State's Alimony Law on Constitutional Grounds

On Nov. 7, 2013, four anonymous plaintiffs from different judicial districts around Connecticut filed a constitutional challenge to the State's alimony laws, saying they affect a “fundamental liberty interest in ending a marriage and in remarrying.” Although the laws have been challenged before, this appears to be the first constitutional argument on the subject advanced in the courts. The complaint alleges that the concept of alimony is outdated, and that the lack of guidance for judges means that payors can be unfairly deprived of their funds. “In no other area of law is the judiciary cast adrift and empowered to force the transfer of a private citizen's assets with no stated goal against which to measure the appropriateness of the award,” the plaintiffs say. The legislature attempted in 2012 to come up with an income-based formula for determining alimony, but the proposal soon died. The issue may come up for discussion again, however, after the legislature receives the results of a study on the subject now being undertaken by a task force created by the Judiciary Committee. The report is expected to be turned in to the legislature in February.