In re Davis (18-30727)

A divorce decree awarded the debtor’s former spouse 35% of his county retirement pension.  The debtor’s Chapter 13 plan proposed to treat the award as a property settlement subject to discharge upon completion of the plan.  The former spouse objected, claiming her 35% interest was her sole and separate property.

The court held that the award was a property settlement and not alimony.  Further, state law prohibits a divorce court from assigning county retirement pension rights to a former spouse.  The court held that the debtor did not hold payments from the pension in constructive trust for his former spouse.  Finally, the court held the debtor had filed his petition in good faith despite errors and omissions on his Schedules and Statement of Financial Affairs.

Wednesday, January 30, 2019