In re Baldwin

• Decision Date: 05 January 1966
• Docket Number: No. B 05079.,B 05079.
• Citation: 250 F. Supp. 533
• Parties: In the Matter of William Orville BALDWIN, Bankrupt.
• Court: U.S. District Court — District of Nebraska

250 F. Supp. 533

In the Matter of William Orville BALDWIN, Bankrupt.

No. B 05079.

United States District Court D. Nebraska.

January 5, 1966.

J. Patrick Green, Omaha, Neb., for bankrupt.

ROBINSON, Chief Judge.

This matter is before the Court on the bankrupt William O. Baldwin's petition for review of the proceedings before the Referee in Bankruptcy. The controversy centers around the exclusion by the Referee of certain debts from the discharge of the bankrupt.

The debts which were excepted from the discharge were incurred by the bankrupt while he was married to Wilma T. Baldwin. On May 18, 1965, Mrs. Baldwin brought a divorce action against the bankrupt and a settlement agreement was entered into. On July 30, 1965, the District Court of Douglas County, Nebraska, entered a decree of divorce, in which the prior settlement agreement was approved and confirmed. The court file from the state district court was offered and received into evidence before the Referee in Bankruptcy.

Paragraph six 6 of the settlement agreement provides as follows:

"6. The Husband specifically agrees to assume as his own responsibility and to pay the following debts which are now joint obligations of the Husband and Wife:

a. Brandeis—$1,200.00

b. Cash Credit Corporation—$1,200.00

c. Household Finance Company— $1,200.00

d. Standard Oil Co.—$500.00."

On August 23, 1965, the bankrupt filed a voluntary petition in bankruptcy, listing the debts mentioned in paragraph six of the settlement agreement although in different face amounts in Schedule A-2. On October 14, 1965, Wilma T. Baldwin filed an application for an order excluding these debts from the discharge in bankruptcy, claiming that they come under the heading of alimony or maintenance or support of wife or child within the meaning of Section 17 of the Bankruptcy Act.

The Referee excluded the debts owing to Cash Credit Corporation and Household Finance Company from the discharge of the bankrupt, accepting the contentions of Mrs. Baldwin as correct. The other two debts in paragraph six are not before us at this time and we therefore shall not further concern ourselves with them. The bankrupt objects to this exclusion and filed the present petition to have that determination reviewed by this Court.

A discharge in bankruptcy releases a bankrupt from all of his provable debts except those, among others, which are liabilities for alimony due or to become due, or for maintenance or support of wife or child. 11 U.S.C.A. § 35. We must therefore determine whether this rule should apply in this instance to exclude these debts from the discharge in bankruptcy. We find that it does.

The bankrupt makes a distinction between an obligation to make direct alimony and/or support payments in cash or property to a divorced wife and the obligation to make payments on loans secured by marital property. We have concluded, however, that this distinction would ignore the intent of Congress in adopting the exclusion. It is the husband's duty to support his wife and children, which duty may be enforced in a variety of ways. Applied to the situation found here, it may be enforced by refusal to exclude said debts from a discharge in bankruptcy. A close analysis of the debts here in question they are secured by household...