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In re Bruce (Case No. 16-60489) 9/6/2016

Creditor-ex-spouse objected to confirmation of Debtor's plan that did not fully provide for a lump-sum home equity line payment arising out of a property settlement agreement claimed as a domestic support obligation.  After the parties briefed the issue and the hearing was held, the Debtor then objected to the ex-spouse’s proof of claim. The Debtor has the burden of proof as to compliance with Chapter 13 requirements, but the objecting party bears the burden of proof as to its objection.  The Court denied confirmation of the amended plan as it did not provide for the creditor’s priority claim for a domestic support obligation at all. To determine the amount of priority claim, the Court then turned to the Debtor’s objection to the proof of claim.  The burden shifted to the Debtor to present evidence to rebut the presumption of validity of the creditor’s claim.  After considering the Webber factors, the Court found that the creditor-ex-spouse did not meet her burden to demonstrate that, contrary to the plain language of divorce decree and property settlement agreement, the lump sum equity line payment was intended as a domestic support obligation under 11 U.S.C. § 507(a).  The Court held that the obligation at issue was simply a lump sum division of marital debt and sustained the Debtor’s objection.

Tuesday, September 6, 2016
Burden of Proof
Claim Objections
Confirmation of Plan
Domestic Support Obligations
Priority Claim
Proofs of Claim