The parties' intent is the "initial inquiry" to determine whether a debtor's obligation to his or her former spouse is actually in the nature of alimony, maintenance or support. This inquiry, however, does not turn on one party's post hoc explanation as to his or her state of mind at the time of the agreement, even if uncontradicted. Rather, the critical inquiry is the shared intent of the parties at the time the obligation arose.
Defendant filed a voluntary petition for bankruptcy under Chapter 7 of the Bankruptcy Code. Plaintiff filed a complaint with the bankruptcy court to determine the dischargeability of defendant's maintenance obligations, which were included in the parties' property settlement agreement. While the bankruptcy court found the debt to be nondischargeable pursuant to the Bankruptcy Code, 11 U.S.C.S. §523(a)(5), it stated that if it could consider extrinsic evidence it would have found the debt to be nondischargeable as a property settlement. The district court affirmed the bankruptcy court's decision on an alternative ground.
Were the payments made by defendant to plaintiff for support, and thus nondischargeable under the Bankruptcy Code?
On appeal, the court affirmed the district court and determined in light of the clear expression of the parties' intent exhibited by the language and structure of the agreement, the parties' placement of the tax burden, and plaintiff's obvious need for support, the bankruptcy court erred in alternatively finding the parties' intended the obligation as a property settlement.