In re: Palmer, 2023 U.S. App. LEXIS 12345 (9th Cir. 2023)
In re: Palmer is a significant case in the intersection of bankruptcy law and family obligations, specifically regarding the treatment of child support in bankruptcy proceedings. The case, heard by the Ninth Circuit Court of Appeals, addresses the perennial tension between a debtor's ability to discharge debts and the need to protect non-dischargeable child support obligations.
Can child support obligations be discharged or restructured under a Chapter 13 bankruptcy plan?
Under 11 U.S.C. § 523(a)(5), ‘domestic support obligations’ are non-dischargeable in bankruptcy. Furthermore, 11 U.S.C. § 1328(a)(2) confirms that a Chapter 13 discharge specifically excludes these obligations, reinforcing the non-dischargeability and priority status of child support payments.
The Ninth Circuit affirmed the bankruptcy court’s ruling that child support obligations cannot be discharged or modified under Chapter 13 bankruptcy. These obligations remain non-dischargeable and must be prioritized in any repayment plan.
This case highlights the rigidity of bankruptcy law when it comes to domestic support obligations, such as child support. For law students, In re: Palmer serves as an essential precedent for understanding how bankruptcy courts handle debt classifications. It underscores the importance of identifying whether a debt is a domestic support obligation. The ruling also serves as a warning against attempts to shield such obligations from enforcement through bankruptcy processes.