Bankruptcy court authority in the domestic relations area is limited.  Clearly, these courts lack authority to grant divorces, decide custody or award support.  However, because of their responsibility for discharge determinations and because of exceptions to discharge for support and property settlement obligations under §§523 (a)(5) and (15), bankruptcy courts have statutory authority to decide: (1) if an obligation is in the nature of alimony, support or maintenance as a matter of federal bankruptcy law, and (2) whether certain property settlement obligations are dischargeable.  These statutory directives put bankruptcy courts into a role that appears to contradict traditional federal non-involvement in domestic issues.  However, it is a role that is limited in scope.

Moreover, when the issue is a §523(a)(5) (or, after 2005, §523(a)(15) as well) exception to discharge, state courts have concurrent jurisdiction with bankruptcy courts, as discussed in Chapter IX on discharge issues.

Despite this partial concurrent jurisdiction, state courts seldom have an opportunity to determine dischargeability during a typical divorce case.  Unless a bankruptcy was pending at the time of the divorce, the state court would not be called upon to determine dischargeability.  On the other hand, a state court’s factual findings in a divorce decree may have preclusive effect in a later dischargeability determination.  If a divorce is filed just before or during a bankruptcy case, the bankruptcy court might grant relief from the automatic stay to allow the state court to make its determinations including those on dischargeabilty of domestic relations debt.

 See Also:  Chapter 7 Bankruptcy