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In re Bhatt (Case No. 02-03239) 06/10/2005

The Debtor and his ex-spouse entered into a separation agreement which provided that the Debtor was to pay all of the undergraduate tuition for their three dependent children (approximately 17, 15 and 13 years old).  A divorce decree was entered, which incorporated the terms of the separation agreement.  The Debtor then filed for bankruptcy, and his ex-spouse filed a claim of $225,589.40 for reimbursement of primary and secondary school tuition for their children, which she asserts is entitled to priority status under 11 U.S.C. § 507(a)(7).  The Chapter 7 Trustee objected to the priority status.  The Court agreed with the Trustee, holding that a claim is a seventh priority claim under Section 507 only if the underlying debt was incurred in connection with a separation agreement, divorce decree, or other court order.  In this case, neither the separation agreement nor the divorce decree provide for the payment of the dependent children's primary and secondary school tuition.  The separation agreement only provides for the payment of the children's undergraduate tuition; "undergraduate" is defined as "of, relating to, or engaged in college or university studies prior to the first decree."  Accordingly, the Court disallowed the ex-spouse's claim of $225,589.40 in full.

Date: 
Friday, June 10, 2005
Category: 
Claim Objections
Domestic Support Obligations
Priority Claim
Chapter: 
7