Outline of December 2013 Bankruptcy and Divorce Seminar.
When Bankruptcy and Domestic Relations Collide
(How Bankruptcy Can Impact Representation of the Divorce Client)
BRENDA G. BROOKS
MOORE & BROOKS
6207 HIGHLAND PLACE WAY
KNOXVILLE, TN 37919
PHONE: 865 450-5455
FAX: 865 622-8865
DECEMBER 3, 2013
“BAPCPA” Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
Took effect on October 17, 2005. 2169 chapter 7 cases filed that month.
A great many changes were made to the Bankruptcy Code
many of which deal specifically with “domestic support obligations”
I. POST-BAPCPA, BANKRUPTCY IN GENERAL
A. TWO TYPES OF CONSUMER BANKRUPTCIES:
1. Chapter 7 –
Often called a straight, total or complete bankruptcy or fresh start bankruptcy.
Retain real and personal property in most cases while wiping out debt.
Typical duration from filing to discharge – three months.
2. Chapter 13 –
Debt consolidation and repayment bankruptcy
Repay a portion (or all) debts over three to five years
Most file to stop a foreclosure or repossession.
Forces creditor to accept monthly payments to cure default
Ex. Mortgage balance of $100,000.00 payable at $1000.00 p/mo.
Client is 6 months or $6000 behind on mortgage.
Mortgage payment over 60 month bankruptcy is now $1100.00/mo.
$1000.00 regular payment plus $100.00 or 1/60 of arrearage.
Upon exiting the bankruptcy, the client is current on the mortgage
B. ONE TYPE OF COMMERCIAL/MILLION $ PLUS INDIVIDUAL BANKRUPTCY:
CHAPTER 11 –
Chapter 13 bankruptcy debt limits – $1,149,525 secured, $383,175 unsecured.
BAPCPA imposes the same limits on discharge of marital debt as Chapter 7.
C. INDIVIDUAL EXEMPTIONS AVAILABLE IN ALL CHAPTERS:
Allows the debtor to take advantage of bankruptcy w/out forfeiting assets.
TENNESSEE has opted out of the federal exemptions available to the debtor.
TENNESSEE EXEMPTION LAW HAS CHANGED DRAMATICALLY
§ 26-2-301 Homestead Exemptions –
$5,000.00 per individual with no minor children.
$7500.00 for Husband and Wife w/ no minor children.
$12,500 individual aged 62.
$20,000 per couple if one spouse is 62.
$25,000.00 couple both 62 or older.
HUGE An individual who has one (1) or more minor children in the individual’s
CHANGE custody shall be entitled to a homestead exemption not exceeding
$25,000 on real property that is owned by the
individual and used by the individual as a principal place of residence.
$25,000 per individual property owner with custody of a minor child
A total of $50,000 if the married parents are joint property owners
7/1/10 § 26-2-103, Personal Property or “Wildcard” Exemption –
CHANGE $10,000 per individual in personal property, including cash and
bank accounts. $20,000 per couple.
§26-2-111(1)(D) – IRA and Pension Exemptions –
Employer funded 401(k) retirement plans are subject to title I
of ERISA, and do not become property of the bankruptcy estate.
In Tennessee generally “retirement” funds are not property of the estate
or can be exempted. However the issue is so complex that an expert in
this area of the law should be consulted.
D. BAPCPA’S EFFECT ON QUALIFYING FOR BANKRUPTCY:
1 “Means Test” (we call it the “mean” test) to qualify for Chapter 7.
HH Income determines whether individual qualifies for Chapter 7.
INCOME CAPS DEPENDING ON FAMILY SIZE:
1 PERSON 2 3 4 5
$39,759.00 $48,053.00 $56,042.00 $62,805.00 $70,905.00
2. What happens to consumers who “fail” the means test?
They either do not file bankruptcy or file Chapter 13 bankruptcy.
“Failing” requires a chapter 13 filer to “commit” to a 5 year re-pymt.
II. HOW BAPCPA SPECIFICALLY RELATES TO DIVORCE ACTIONS
A. DISCHARGE – THE ULTIMATE GOAL OF BANKRUPTCY
Discharge is the release from indebtedness sought by the debtor and
provides the debtor with a fresh start. It is usually the ultimate relief
sought by the debtor when he files for bankruptcy protection.
Chapter 7 discharge – 11 U.S.C. §727
Chapter 13 discharge – 11 U.S.C. §1328
Chapter 11 discharge – 11 U.S.C. §1141
B. EXCEPTIONS TO DISCHARGE- CHAPTER 7
BAPCPA created a major change regarding debts incurred in divorce:
DEBTOR CANNOT DISCHARGE OBLIGATIONS TO EX-SPOUSE IN CHAPTER 7:
1. “DOMESTIC SUPPORT OBLIGATIONS” (DSO)
FORMER 11 U.S.C. §523(a)(5) used terms “Alimony, maintenance and support”.
Now called “Domestic Support obligations” (DSO).
11 U.S.C.§523(a)(5) DSO exceptions to discharge:
§ 523(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b)
of this title does not discharge an individual debtor from any debt—
(5) for a domestic support obligation; ….
a. SO, WHAT IS A DOMESTIC SUPPORT OBLIGATION?
(14A) The term “domestic support obligation” means a debt that accrues before, on,
or after the date of the order for relief in a case under this title, including interest that
accrues on that debt as provided under applicable nonbankruptcy law notwithstanding
any other provision of this title, that is—
(A) owed to or recoverable by—
(i) a spouse, former spouse, or child of the debtor or such child’s
parent, legal guardian, or responsible relative; or
(ii) a governmental unit;
(B) in the nature of alimony, maintenance, or support (including assistance
provided by a governmental unit) of such spouse, former spouse, or child of
the debtor or such child’s parent, without regard to whether such debt is
expressly so designated;
(C) established or subject to establishment before, on, or after the date of the
order for relief in a case under this title, by reason of applicable provisions of—
(i) a separation agreement, divorce decree, or property settlement
(ii) an order of a court of record; or
(iii) a determination made in accordance with applicable
nonbankruptcy law by a governmental unit; and
(D) not assigned to a nongovernmental entity, unless that obligation is
assigned voluntarily by the spouse, former spouse, child of the debtor, or such
child’s parent, legal guardian, or responsible relative for the purpose of
collecting the debt. (emphasis supplied)
11 U.S.C. § 101(14A) (2005).
***** In defining “domestic support obligation” BAPCPA uses the definition of a
nondischargeable debt for alimony, maintenance, and support contained in the former
§523(a)(5); therefore, case law construing the former 523(a)(5) is relevant and persuasive.
b. FEDERAL BANKRUPTCY LAW DETERMINES WHAT IS A DSO.
“While state law must be considered, whether a debt falls within the definition of a
domestic support obligation is a matter of federal law, and because the inquiry is controlled
by federal rather than state law, “a domestic support obligation can be deemed actually in the
nature of support under §523(a)(5) even if it is not considered ‘support’ under state law.”
In re Rose, Case No. 08-30051 (Bankr., E.D. TN at Knoxville, 2008)
2. NON-SUPPORT DOMESTIC DEBT (NON-DSO)
PROPERTY SETTLEMENT AND HOLD HARMLESS AGREEMENTS
BAPCPA expanded the automatically non-dischargeable marital debt to
include debts incurred in the course of separation or divorce such as
property settlements, assumption of third party debt or hold harmless
11 U.S.C. § 523(a)(15) Non-DSO Exceptions to discharge:
§523(a) A discharge under section 727, 1141, 1228 (a), 1228(b),or1328(b)
of this title does not discharge an individual debtor from any debt—
(15) to a spouse, former spouse, or child of the debtor and not of the kind
described in paragraph (5) that is incurred by the debtor in the course of a
divorce or separation or in connection with a separation agreement,
divorce decree or other order of a court of record, or a determination
made in accordance with State or territorial law by a governmental unit;
a. Chapter 7 is no longer a means to escape hold harmless
agreements and ill-advised property settlements.
PRE-BAPCPA/ FORMER §523(A)(15)
If not alimony, maintenance, or support, dischargeable upon showing of hardship.
BAPCPA did away with hardship determination.
“Divorce-related debts that are not in the nature of alimony, maintenance, or
support but have been awarded in connection with a divorce or separation, including
joint debts subject to hold harmless agreements, are nondischargeable, and it is
immaterial whether it would be a hardship upon the debtor to pay them. …
[S]ection 523(a)(15) now provides, unqualifiedly that a property settlement obligation
encompassed by §523(a)(15) is nondischargeable [and]… the distinction between a
domestic support obligation and other types of obligations arising out of a marital
relationship is of no practical consequence in determining the dischgeability for he
debtor”. In re Cooper, Adv. Pro 09-3068 (BANKR., E.D. TN at Knoxville, 2009).
b. Non-debtor ex-spouse need not object to bankruptcy discharge.
BAPCPA also did way with time sensitive requirement that the
non-debtor ex-spouse file a complaint in Bankruptcy Court
pursuant to §523(a)(15) to keep non DSO obligations from being
discharged in chapter 7.
C. EXCEPTIONS TO DISCHARGE – CHAPTER 13
1. DSO obligations are not dischargeable in Chapter 13.
11 U.S.C. §1328 provides:
(a) Subject to subsection (d), as soon as practicable after completion by the
debtor of all payments under the plan, and in the case of a debtor who is
required by a judicial or administrative order, or by statute, to pay a
DOMESTIC SUPPORT OBLIGATION, after such debtor certifies that all
amounts payable under such order or such statute that are due on or
before the date of the certification (including amounts due before the petition
was filed, but only to the extent provided for by the plan) have been paid, …
the court shall grant the debtor a discharge of all debts provided for by the
plan or disallowed under section 502 of this title, except any debt –
(2) of the kind specified in section … [523(a)(5)]….
(“in the nature of alimony, maintenance, or support…”)
IF DESIGNATED BY THE STATE COURT AS SUPPORT:
“An award that is designated as support and that has the traditional state law
indicia of a support obligation is to be conclusively presumed to be support by
the bankruptcy court. “Sorah v. Sorah, 163 F. 3d 397, 401 (6th Cir. 1998)
“Under Sorah, a non-debtor who proves that the state court structured the
obligation as a support obligation, considering “traditional state law indicia
that are consistent with a support obligation,” has satisfied his or her burden
of proof that the debt is nondischargeable.”
IF NOT DESIGNATED BY THE STATE COURT AS SUPPORT:
In re Calhoun’s Three Prong Test In re Calhoun, 715 F.2d at 1109
The following three-part test is used within the Sixth Circuit to decide whether
the financial obligation not labeled as alimony, maintenance, or support is
actually in the nature thereof:
(1) Intent to provide support.
To decide whether an obligation is actually support, the court must consider
“the traditional state law indicia that are consistent with a support obligation.”
In re Calhoun at 1108 See also T.C.A. §36-5-121(i)
(2) Whether the award was effectively support in light of the recipient non-debtor’s
(3) Whether the award was “manifestly unreasonable under traditional
concepts of support.
** VERY ** 2. Non-DSO §523(a)(15) obligations are dischargeable after making
IMPORTANT payments over the length of the chapter 13 plan period.
THE KEY TO DISCHARGE – Is the obligation a DSO or not?
D. ARE ATTORNEY FEES “DSO” OBLIGATIONS?
1. Ex-spouse’s attorney fees owed to third party attorney:
Attorney Monceret objected to discharge under §523(a)(5) asserting the
attorney fee award was non-dischargeable alimony. Knoxville Bankruptcy
Judge Richard Stair, using only the first prong of the Calhoun three prong test,
analyzed the fee and found it to be nondischargeable. Judge Stair noted that
the trial court identified the $3,000 attorney fee award as alimony and the state
law rationale for designating attorney fee as alimony.
Most importantly Judge Stair noted that “many courts have held that
even though awards of attorneys’ fees were made directly to the actual
attorneys, the awards were nonetheless nondischargeable pursuant to
Monceret v. Ellis, Adv. Proc. 04-3102 (E. D. Tenn. Knoxville 2005).
2. Guardian ad litem fees assessed against the debtor:
When faced with the question of whether guardian ad litem fees are
nondischargeable domestic support obligations, the courts have answered
overwhelmingly in the affirmative.
[T]he best interests of the child is an inseparable element of the child’s
“support” –put another way, 11 U.S.C. 523(a)(5) should be read as using the
term “support” in a realistic manner; the term should not be read so narrowly as
to exclude everything bearing on the welfare of the child but the bare paying of
bills on the child’s behalf. (citations omitted)
In re Rose, Case No 08-30051, p. 6 (Bankr. E. D. TN at Knoxville 2008).
III. MISC. PROTECTIONS FOR THE NON-DEBTOR EX-SPOUSE
A. CHAPTER 13 PROTECTS THE “CO-DEBTOR”.
11 U.S.C. §1301 provides a “co-debtor” stay by the filing of a Chapter 13 Bankruptcy.
Without relief from the automatic stay the co-debtor can not be pursued for
consumer debt collection when a petition is filed under Chapter 13.
Chapter 7 indirectly protects the co-debtor
Co-debtor stay does not exist when a bankruptcy is filed under Chapter 7.
The ex-spouse MUST seek relief from the automatic stay to enforce rights
under the divorce decree.
B. CHAPTER 13 GIVES TOP PRIORITY TO PAYMENT OF DSO CLAIMS.
11 U.S.C. §507(a) establishes the pecking order in which claims are paid and gives
first priority to payment of unsecured claims for domestic support obligations,
that are owed directly to or recoverable by a spouse, former spouse, or child of the
debtor, or such child’s parent, legal guardian, or responsible relative….
11 U.S.C. §507(a)(1)(A)
C. CHAPTERS 13 AND 11 REQUIRE THE DEBTOR TO STAY CURRENT ON ALL
POST-PETITION DSO OBLIGATIONS DURING THE LIFE OF THE BANKRUPTCY.
1. If the debtor is not current on ongoing obligations, the ex spouse can
block confirmation and have case dismissed.
2. If the debtor, at any time, over the life of the bankruptcy, falls behind in
an ongoing DSO, the ex-spouse can file a motion to have the chapter 13
THIS IS POWERFUL – often the debtor is in chapter 13 with a new
spouse to save a house or car. The ex-spouse can cause him/her to lose their
home, or car unless the alimony, maintenance or child support remains current.
3. Debtor must file an affidavit with the court at the conclusion of the
bankruptcy affirming that he/she is current on all DSO obligations.
Non-debtor ex-spouse can assert that debtor is not current and bar discharge.
D. PROPERTY OF THE ESTATE IN A CHAPTER 13
The Bankruptcy Order Confirming the Chapter 13 Plan provides all assets
remain “property of the estate” during the term of the chapter 13 plan.
Post-petition collection of DSO’s.
Stay relief is required to begin collection.
DSO Wage Orders that existed pre-bankruptcy are not stayed.
E. CHAPTER 7, 11, 12 and 13 TRUSTEES ARE REQUIRED TO NOTIFY THE
DSO CREDITOR OF THE DEBTOR’S BANKRUPTCY FILING.
IV. EFFECT OF THE AUTOMATIC STAY ON PENDING DIVORCE LITIGATION
11. U.S.C. §. §362 The “Automatic Stay,”
Immediate injunction triggered by the filing of a bankruptcy petition.
Remember – None of the debtor’s obligations under the MDA will be
discharged in the chapter 7 and can be enforced during the bankruptcy by
FIRST SEEKING RELIEF FROM THE AUTOMATIC STAY and, after the
bankruptcy is concluded by filing for contempt in state court.
A. CERTAIN LIMITED EXCEPTIONS TO THE AUTO. STAY – 11 U.S.C. §362(b)
BAPCPA substantially increased the exceptions to the automatic stay
relating to domestic support obligations and family law proceedings:
A criminal action or proceeding against the debtor. §362(b)(1).
The establishment of paternity. §362(b)(2)(A)(i).
The establishment or modification of an order for domestic support obligations.
* Actions for child custody or visitation. §362(b)(2)(A)(iii).
* Actions for the dissolution of a marriage, except to the extent that such
proceeding seeks to determine the division of property that is property of the
estate. §362 (b)(2)(A)(iv). (emphasis supplied).
* Domestic violence proceedings. §362(b)(2)(A)(v)
The collection of a domestic support obligation from property that is not property
of the estate. §362(b)(2)(B). (emphasis supplied)
Withholding of income that is property of the estate or property of the debtor for
payment of a domestic support obligation under a judicial or administrative order or
* Withholding, suspension, or restriction of a driver’s license under State law to
enforce overdue domestic support obligations. §362(b)(2)(D)
* Reporting of overdue support owed by a parent to any consumer reporting
* Interception of a tax refund, to aid in the collection of overdue domestic support
* Enforcement of a support related medical obligations. §362(b)(2)(G).
* These items were added by BAPCPA as exceptions to the stay injunction.
B. §362 DOES NOT GIVE YOU AN UNLIMITED GREEN LIGHT TO PROCEED.
1. Bankruptcy filing creates a separate legal entity called a Bankruptcy Estate.
“Property of the bankruptcy estate” is protected from seizure.
2. A divorce proceeding is both:
In personam in relation to the marital status of the parties, and
In rem regarding the division of property and support obligations.
3. The automatic stay protects the property of the estate, not the debtor’s
Possible Stay Violations –
– Filing for Divorce that seeks to determine a division of property.
– Collection of domestic support obligations from property of the estate.
NO stay violation where the objective is just securing the divorce itself.
It is important to note that, unlike some of the other exceptions to the stay
listed in section 362(b), [§§362(b(2)(A)(ii) and (b)(2)(B) do] not extend to the
“commencement or continuation[of an action or proceeding” to enforce an
obligation. Thus, section 362(b)(2)(B) protects an obligee who receives
property on a pre-petition obligation, for example, through a prior wage
attachment, from claims that such receipt is improper, but does not authorize
enforcement litigation against the debtor without relief from the automatic stay.
A separate provision, section 362(b)(2)(A), grants an exception for the
commencement or continuation of an action or proceeding, but only for the
establishment or modification of an order for alimony, maintenance or support.
Proceedings to enforce such orders are conspicuously omitted from that
exception and continue to be stayed, except in cases in which they are
criminal in nature and permitted by section 362(b)(1).
Jensen v. Jensen (In Re Jensen) Adv. Proc. 05-3049 (Bankr. E.D. Tenn at Knoxville
2/28/06. quoting Lori v. Lori (In re Lori), 241 B.R. 353, 355 (Bankr. M.D. Pa. 1999).
C. ATTORNEY AND CLIENT MAY BE LIABLE FOR STAY VIOLATIONS.
11U.S.C. §362(k) provides sanctions for violations of the Stay Injunction.
1. DAMAGES, PUNITIVE AND ACTUAL:
Once the Bankruptcy Court finds a violation of the automatic stay, it must determine
whether the violation was willful, thus entitling the Plaintiff to damages.
“A violation is willful if ‘the creditor deliberately carried out the prohibited act
with knowledge of the debtor’s bankruptcy case.’” Printup, 264 B.R. at 173 (quoting
Walker v. Midland Mortgage Co. (In re Medlin), 201 B.R. 188, 194 (Bankr. E.D. Tenn.
A specific intent to violate the stay is not required, or even an awareness by the
creditor that her conduct violates the stay. It is sufficient that the creditor knows of the
bankruptcy and engages in deliberate conduct that, it so happens, is a violation of the
stay. Moreover, where there is actual notice of the bankruptcy it must be presumed
that the violation was deliberate or intentional. Satisfying these requirements itself
creates strict liability. There is nothing more to prove except damages.
Jensen v. Jensen (In Re Jensen) Adv. Proc. 05-3049 (Bankr. E.D. Tenn at Knoxville
2. A Bankruptcy Judge has been given wide leeway when awarding punitive
damages and attorney fees to an individual injured by a willful violation of
the automatic stay.
If the court determines that a willful violation occurred, and the Plaintiff suffered
any injury due to the violation, the statute mandates an award of actual damages,
including costs and attorney’s fees, and “in appropriate cases, [an injured debtor] may
recover punitive damages.” [11 U.S.C. §362(k)] Jensen v. Jensen (In Re Jensen) Adv. Proc. 05-3049 (Bankr. E.D. Tenn at Knoxville
V. DRAFTING MARITAL AGREEMENTS UNDER BAPCCA
1. Be VERY careful with your designation of what is and is not a
“domestic support obligation” (“DSO”).
2. Be careful not to accidentally create a DSO or § 523(a)(15) to a third party
3. Use hold harmless language and specify the classification of all obligations.
4. Consider helping out the poor bankruptcy lawyers and judges.
List or attach financial data to the MDA.
balance sheets, tax returns, listing of liabilities and assets.
Document your rationale for award of support.
Document your proof of the spouse’s financial solvency.
5. Demonstrate your expertise by including a bankruptcy section.
Consider the following:
A. SAMPLES OF MDA– BANKRUPTCY CLAUSE/PARAGRAPH:
Should either of both of the parties to this MDA file or be placed into Bankruptcy,
the parties desire to document the effects of a bankruptcy on this MDA.
Domestic Support Obligations
The parties hereto their counsel and the court are aware that “domestic support obligation” as
defined by 11 U.S.C. § 101(14A) will pursuant to 11 U.S.C § 523(a)(5) NOT be discharged by
any Bankruptcy and will not be effected by any bankruptcy proceeding.
The parties hereto their counsel and the court are aware that “non-support domestic
obligations” as set forth in 11 U.S.C § 523(a)(15) can be discharged only by the completion
of a Chapter 13 Plan.
The Court, the parties and their lawyers are aware of the three prong test set forth in Long v.
Calhoun (In re Calhoun), 715 F.2d 1103, 1107 (6th Cir. 1983). The Court finds and the parties
agree that all obligations designated as Domestic Support Obligation are: (1) intended to be
support; (2) are effectively support in light of the recipient’s present needs; and (3) are not
“manifestly unreasonable under traditional concepts of support”.
The payment of monthly child support, set out in section xx of this agreement, is a domestic
support obligation as defined by 11 U.S.C. § 101(14A).
1. The following obligations are domestic support obligation as defined by
11 U.S.C. § 101(14A):
alimony mortgage debt attorney fees
child support secured debt
college education medical bills
[Identify the various sections of the MDA setting forth DSO obligations.] [Note: Be very careful about classifying any obligations to third parties particularly
unsecured debt as DSO! Attempt to make all DSO obligations payable by wage
order.] 2. The following obligations are Non-Support Domestic Obligations as defined by
11 U.S.C. § 523(a)(15):
Hold harmless agreements with regard to:
Credit cards, etc.
[Identify the various sections of the MDA setting forth § 523(a)(15) obligations.] [IMPORTANT TIP: Try to include only the hold harmless of the other party as either a DSO
or non-support domestic obligation. In other words, don’t inadvertently create a payment
obligation between your client and the ex-spouse’s creditor.] You might want to consider including:
With regard to § 523(a)(15) obligations. The parties agree that it is not the obligation to a
third party that is a § 523(a)(15) obligation, it is the obligation to hold the party, who is not the
primary obligator, harmless from any and all financial loss, (including income taxes payable
as the result of any settlement), that is the § 523(a)(15) obligation.
3. The parties agreed that the following obligations are neither domestic support
obligations nor § 523(a)(15) obligations:
Credit card debt;
Medical bills; etc.
Signature loans and/or loans from family members
B. USE LIENS TO SECURE 523 (A)(5) AND (A)(15) OBLIGATIONS.
Use liens to protect DSO and 523(a)(15) non-support divorce obligations. Where there are
known creditors or when the financial affairs of a spouse are unknown a simple lis pendis
upon the filing of a divorce makes sense. See, Farrey v. Sanderfoot, 500 U.S. 291 (1991). If
a judgment is about to be entered against one spouse consider having a BFP purchase that
spouse’s right of survivorship interest in real property.
Use liens in Agreements and Orders to protect the parties. Where the parties are
transferring title to one or the other, or payments are to be made to balance one spouses
receipt of assets consider including the sentence:
Each party hereby grants the other party a lien against all of their property, real and personal,
including property acquired in the future, to secure the payment of domestic support
obligations as defined by 11 U.S.C. § 101(14A).
Each party hereby grants the other party a lien against all of their property, real and personal,
including property acquired in the future, to secure the payment of non-support obligations as
described in 11 U.S.C. § 523(a)(15).
Plaintiff is hereby awarded a judicial lien against all of defendant’s property, real and
personal, including property acquired in the future, to secure the payment of:
(a) domestic support obligations as defined by 11 U.S.C. § 101(14A);
(b) non-support obligations as set forth in 11 U.S.C. § 523(a)(15);
(c) defendant’s obligations set forth in § xxx of the MDA, [or whatever payment obligation the
defendant is required to make.] [Or specifically identify the property of the obligator and the obligation being secured.] The real property described in section xxx of this MDA that becomes the sole property of the
plaintiff is hereby encumbered with a lien in favor of the defendant to secure the obligations
of the plaintiff set forth in Section xxx of this MDA
IMPORTANT NOTE: Whether to allow for the perfection of this lien is another matter. As a
result of § 522(f)(1) a bankruptcy trustee can not avoid a lien for a DSO but a lien for §
523(a)(15) obligations will have to be properly perfected, usually by the filing of UCC-1s and
Trust Deeds.] ****************************
Many thanks to my law partner, Jim Moore, for his invaluable help preparing these materials.