All of this this plays an important role in determining whether attorneys’ fees owed to a non-debtor spouse, whether directly or indirectly, are dischargeable. Most courts are in agreement that a debt owed to a non-debtor spouse for attorneys’ fees is not dischargeable. The cases never put any import on whether the debt is payable directly to the non-debtor spouse or to her attorneys. Interestingly, courts have generally followed one of two roads in reaching this same conclusion of nondischargeability. Some courts find the debt excepted under the DSO statute while other courts use the broader statute.
Following the first “road," courts generally conclude that attorneys’ fees wouldn’t be granted by a matrimonial court without a finding of financial need on behalf of the non-debtor spouse; therefore, the attorneys’ fees are in the nature of alimony, maintenance, or support. On the second “road,” courts find it unnecessary to make a determination as to whether the attorney’s fees are in the nature of alimony, maintenance, or support; instead, the courts rely on the broader statute and conclude that the non-debtor spouse’s attorneys’ fees are a debt incurred by the debtor in connection with a divorce and are therefore nondischargeable.
Of course, the above will not except from discharge fees the debtor owes to his own attorneys. Such fees will usually be discharged unless they are excepted under some other basis in the bankruptcy code.
While the courts and statutes generally give broad protection to a non-debtor spouse creditor, navigating the complexity of the Bankruptcy Code and honing in on the reason can often be difficult. One thing is for certain: any potential debtor or non-debtor spouse should have an experienced bankruptcy attorney by their side to advise them on the dischargeability of debts owed by or to them.