Matter of Thomas, Bankruptcy No. 80-1055-D
| Decision Date | 02 July 1981 |
| Docket Number | Adv. No. 80-0203.,Bankruptcy No. 80-1055-D |
| Parties | In the Matter of Tommy Lee THOMAS, Debtor. STATE OF IOWA, ex rel. Jacquelyn THOMAS; Jacquelyn Thomas, Individually; Katrina Louise and Latisha Lea by Jacquelyn Thomas, their mother and next friend; State of Iowa and Iowa Department of Social Services, Plaintiffs, v. Tommy Lee THOMAS, Defendant. |
| Court | United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — Southern District of Iowa |
Asst. Atty. Gen. E. Dean Metz, Burlington, Iowa, for State of Iowa.
Steven R. Hahn, Burlington, Iowa, for Tommy Lee Thomas.
At Des Moines, in the Southern District of Iowa, on the 2nd day of July, 1981.
On the 10th day of October, 1980, the State of Iowa filed a complaint in this case seeking a determination whether a debt due the State of Iowa is dischargeable. The interested parties have agreed to the facts.
A decree of dissolution of marriage filed in the state District Court for Des Moines County on April 11, 1975, granted Jacquelyn Thomas a judgment against the debtor in this case, Tommy Lee Thomas, for the support of two minor children, Katrina Louise Thomas (age 3) and Latisha Lea Thomas (age 8 mos.). The judgment required the debtor to pay the plaintiff $35 each week for each child until the children reached eighteen years of age.
In April of 1974, Jacquelyn Thomas assigned the state court child support judgment to the Iowa Department of Social Services in order to receive assistance under Iowa's Aid to Dependent Children program. Since that time the state has provided the two Thomas girls financial assistance pursuant to that program. See Chapter 239 Code of Iowa (1981).
The debtor filed a voluntary petition in bankruptcy on July 7, 1980.
The parties further agree that the child support payments of the debtor in arrears on the date of bankruptcy are discharged by reason of the provisions of 11 U.S.C. § 523(a)(5)(A).
The plaintiff and the defendant cannot agree on the status of the child support installment payments fixed by the state court's judgment which are due subsequent to the date of bankruptcy.
The plaintiff contends that the post bankruptcy child support installments are nondischargeable. This is the issue the court must decide.
The relevant portions of the Bankruptcy Code are as follows:
The State of Iowa is a "creditor" in this bankruptcy case if it was an entity with a "claim" for future child support that arose at the time of or prior to the order for relief was entered. In this case the date of filing the debtor's petition. These are questions of federal law, as those terms are defined in the Bankruptcy Code.
It is an "entity" because it is a governmental unit. Section 101(14).
The existence of a "claim" turns on when it arose. When a debt serving as the basis of claim arose, in the absence of overriding federal law, is to be determined by state law. Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 67 S.Ct. 237, 91 L.Ed. 162 (1946).
The definition of "claim" could not be broader. All legal obligations of the debtor, no matter how remote or contingent, will be dealt within a bankruptcy case. See House Report No. 95-595, 95th Cong. 1st Sess. (1977) 309; Senate Report No. 95-989, 95th Cong. 2nd Sess. (1978) 21, U.S.Code Cong. & Admin.News 1978, p. 5787. See also In re Cloud Nine, Ltd., 3 B.R. 202, 1 C.B.C.2d 445 (Bkrtcy., D.N.M. 1980).
The State of Iowa has a "claim" against the debtor because it arose prior to the bankruptcy order for relief. The fact that a court-ordered child-support judgment lien does not attach until an installment is due, Broyles v. Iowa Department of Social Services, 305 N.W.2d 718 (Iowa 1981), is not relevant. Jacquelyn Thomas could legally assign future judgments under Iowa law. Id. It is that right that gives rise to the state's "claim." In Siver v. Shebetka, the Iowa Supreme Court stated:
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