E – is for equitable distribution
Equitable distributions are payments that a family court may order from one former spouse to another, and which are not in the nature of alimony and child support. They are named “equitable” because they serve to equally divide the marital property and financial obligations between the former spouses. Like alimony and child support, equitable distributions are not dischargeable in Chapter 7 bankruptcy, but may be dischargeable in Chapter 13. As it usually happens, there is an exception to this rule, as there is to most other rules. In Florida, that exception comes into play when “the court awards a cash payment for the purpose of equitable distribution of marital assets, to be paid in full, or in installments,….” According to Florida Statute sec. 61.075 (2), such equitable distribution award vests when the judgment is awarded. What does this mean to a former spouse, who was ordered to make a cash payment equitable distribution. It means that such equitable distribution is not dischargeable in Chapter 13. And, unlike alimony, it does not terminate upon remarriage or death of either spouse. At least one bankruptcy court in Florida (in an unpublished opinion in In re Rieger), interpreting section 61.075(2) Florida Statutes, ruled that ex-spuse’s equitable distribution, which vested before filing of the bankruptcy petition, had to be included in, and paid through, Chapter 13 plan.
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