Memorandum Decision Reguarding Dischargeability of Debts

Original Filed November 9, 2000


MEMORANDUM DECISION REGARDING DISCHARGEABILITY OF DEBTS Case No. 98-5675-ASW-SA Chapter 7 Adversary No. 98-5457 In re James E. Stafford, Debtor(s). Kathryn M. Stafford, Plaintiff, vs. James E. Stafford, Defendant. MEMORANDUM DECISION REGARDING DISCHARGEABILITY OF DEBTS Before the Court is a complaint filed by Kathryn M. Stafford, Plaintiff (“Wife”), to determine dischargeability of debts owed by James E. Stafford, Defendant and the debtor in this Chapter 7 case (“Husband”). The complaint alleges that Husband’s obligations created by a judgment dissolving the parties’ marriage are non-dischargeable pursuant to 11 U.S.C. Unless otherwise noted, all statutory references are to Title 11, United States Code ("Bankruptcy Code"). §523(a)(5) (a debt in the nature of support) and/or §523(a)(15) (a non-support debt incurred in the course of marital dissolution). The matter has been tried and submitted for decision after post-trial briefing. Wife is represented by Langley Schwartzapfel, Esq. of Samarron & Schwartzapfel and Husband is represented by Saul M. Weingarten, Esq. of Saul M. Weingarten & Associates. At trial, the only witnesses were the parties. This Memorandum Decision constitutes the Court's findings of fact and conclusions of law, pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure. I. FACTS The facts are largely undisputed. The parties divorced in 1994 after a twenty-five year marriage with no children. A judgment of dissolution was filed and entered on June 16, 1994 in Case No. MDR 28449 of the Monterey County Superior Court (“Judgment”); Wife was the petitioner and Husband was the respondent. The Judgment provides that marital status ends October 24, 1994 and that a marital settlement agreement by the parties dated April 21, 1994 (“MSA”) is approved “and the parties are ordered to comply with the terms and conditions stated therein”. Neither party was represented by counsel in the marital dissolution action and they jointly consulted a paralegal, who drafted the MSA. The MSA provides (in pertinent part) as follows: I. GENERALLY ... B. We now intend, by this agreement, to make a final and complete settlement of all of our rights and obligations con- cerning spousal support and division of property. ... III. SUPPORT PAYMENTS TO SPOUSE Whereas both Husband and Wife are fully self-supporting, each party waives the right to receive spousal support from the other knowing that such waiver is irrevocable. ... V. DIVISION OF COMMUNITY PROPERTY AND DEBTS A. The parties warrant and declare under penalty of perjury that the assets and liabilities divided in this agreement constitute all their community and quasi-community assets and liabil- ities. In the event that the division is unequal, the parties knowingly and intelligently waive an equal division of the community property. B. Husband is awarded and assigned the following assets as his share of the community property: 1993 Toyota Pickup Truck; checking account at Pacific Western Bank including all monies on deposit in said account. C. Wife is awarded and assigned the following assets as her share of the community property: 1993 Oldsmobile Silhouette; checking account at First Interstate Bank including all monies on deposit in said account. D. Husband shall pay the following debts promptly when due, and indemnify and hold Wife harmless therefrom: Citibank Visa Card; all remaining payments on 1993 Toyota Pickup Truck. E. Wife shall pay the following debts promptly when due, and indemnify and hold Husband harmless therefrom: Pacific Western Mastercard; all re- maining payments on 1993 Oldsmobile Silhouette. ... VI. REGULAR EXPENSES In consideration of Wife’s waiver of spousal support in paragraph III of this agreement, Husband agrees to pay the follow- ing regular monthly expenses of Wife: (1) One-half (50%) of Wife’s monthly rent. Said amount shall not exceed $200 per month. (2) Wife’s monthly life insurance premium. (3) Automobile insurance on Wife’s 1993 Oldsmobile Silhouette. Wife testified that Husband wanted her to “give up support but said he’d pay some bills”, so Wife asked him to pay the three future expenses set forth in Paragraph VI. Wife said that she asked for help with those expenses to “keep my head above water” and “help me get on my feet again” because she wanted to be able to make all of the monthly payments that would be required of her. At the time of the marital dissolution, Wife had been a licensed vocational nurse for a little over one year and was earning approximately $24,000 annually, but her job was not “steady” due to a low volume of patients and she was not assured of permanent full-time work. Wife’s previous work experience had been as a certified nursing assistant. At the time of the marital dissolution, Husband had been employed as an automobile mechanic for many years and was earning from $18,000 to $20,000 a year. Wife testified that, in dividing the community liabilities, Husband agreed to pay the Citibank Visa account even though it was in Wife’s name, because he had used the credit card to charge numerous prescriptions. Husband paid for Wife’s automobile insurance and paid $200 per month for her rent through February 1996, then stopped making those payments; Wife has paid those expenses ever since, without reimbursement by Husband. Husband never paid any part of the Citibank Visa account and Wife took a loan from a credit union to pay that in full; at time of trial, she was still repaying the loan, with finance charges. Wife contends that, as of May 22, 1998, Husband’s unpaid obligations under the Judgment were: $5,400 for his share of her rent, $1,203.75 for her automobile insurance, $2,756.33 for the Citibank Visa account, and $1,045.48 in finance charges on the loan taken by Wife to pay the Citibank Visa account. Wife continues to pay rent of more than $400 per month and approximately $70.35 monthly for automobile insurance; there was no evidence concerning whether Husband ever paid any life insurance premiums for Wife, or whether Wife ever paid any of those herself. At the time of the marital dissolution, Wife was earning approximately $19 per hour; at time of trial, she was earning approximately $18 per hour. Her reported income for 1998 was $25,000 or $26,000, all from her employment. In June 1999, Wife left her employment at Watsonville Community Hospital, where she had worked as a full-time licensed vocational nurse in the alcohol/drug treatment center earning $20 per hour plus benefits. In July 1999, Wife commenced employment with Country Home Care in Carmel and was working there at time of trial, earning $18 per hour for part-time work of 24 to 36 hours weekly, without benefits. Wife testified that she left her hospital job for a lower-paying one because she had been suffering chest pains and migraine headaches, which her doctor thought were caused by stress; she said that these symptoms have disappeared since her job change. Husband made an offer of proof that was accepted by Wife: at time of trial, Husband was under medical care by a chiropractor and a Veteran’s Administration clinic, had experienced very recent episodes of heart murmurs, had high blood pressure, and suffered from back trouble requiring him to wear a device for mobility -- he could not do any lifting or heavy work, could not endure prolonged sitting or standing, and had no prospect of being able to perform as an automobile mechanic again. Husband testified that he was laid off from his job as a mechanic in April 1998 and collected unemployment benefits for three and a half months, during which time he looked for work but was unable to find a job suitable for his bad back. He said that he was denied disability benefits because, he was told, they were available only to those who were “crippled or blind”. At time of trial, the doctors had not yet released him to do any kind of work but Husband said that, once that occurred, he intended to resume his search for a job with the kind of “light” duties that he would be able to perform, such as janitorial work; he has no training other than as an automobile mechanic. Husband testified that living expenses for himself and his current wife are approximately $1,200 per month (of which $695 per month is rent), that he has no income other than his wife’s Social Security benefits of approximately $612 per month and assistance from his mother-in-law when she is able to provide it. At time of trial, Husband was 59 years old and said that he would not be eligible for any government benefits until he was 60 and one-half years old, at which time he would begin to draw a military pension of $365 per month for life. Husband acknowledged that he had worked for “many years” and made Social Security contributions but said that he did not know what benefits he would receive from that source when he became eligible. On September 30, 1995, an attorney acting on behalf of Husband wrote to Wife and asked if she would agree to modify the MSA to eliminate Husband’s payment of her automobile insurance and half of her rent, in view of Husband’s inability to work due to his back condition. On January 18, 1996, the attorney wrote to Wife again and said that Husband was prepared to move the State Court to modify the MSA. Wife did not reply to either letter, and no modification motion was ever filed. On May 27, 1998, Wife filed in the State Court a declaration alleging that Husband was in contempt because he had failed to make the payments called for by the Judgment. An Order to Show Cause was issued and served upon Husband June 4, 1998. Husband filed his Chapter 7 petition on July 15, 1998. He testified that he did so because “I had other bills that were pushing me”, which were eventually discharged in bankruptcy. II. APPLICABLE LAW A. Support A debt for support is excepted from a Chapter 7 discharge pur- suant to §523(a)(5) if it is a debt: ... to a spouse, former spouse, or child of the debtor for alimony to, maintenance for, or sup-port of such spouse or child, in connection with a sep-aration agreement, divorce decree or other order of a court of record, determination made in accor-dance with State or territorial law by a gov- - ernmental unit, or property settlement agree-ment .... Subsection (A) of the statute excludes from the exception certain support debts that have been assigned; subsection (B) provides that, regardless of how a debt is designated, it must be one that is "actually in the nature of alimony, maintenance, or support". It is well settled that ... the bankruptcy court is obligated to make an independent determination of what constitutes alimony, maintenance or support for purposes of dischargeability. The court is not bound by the label attached by the parties or by a state court. Stout v. Prussel, 691 F.2d 859 (9th Cir.1982). In re Doyle, 70 B.R. 106 (9th Cir. BAP 1986). And, see Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984) (“Shaver”), quoting from Erspan v. Badgett, 647 F.2d 550, 555 (5th Cir. 1981), cert. den., 455 U.S. 945, 102 S.Ct. 1443: ... regardless of how a state may choose to define "alimony", a federal court, for purposes of applying the federal bankruptcy laws, is not bound to a label that a state affixes to an award, and [...], consistent with the objectives of federal bankruptcy policy, the substance of the award must govern. In determining the substance of a marital settlement agreement, “the intent of the parties at the time the settlement agreement is executed is dispositive”, In re Sternberg, 85 F.3d 1400, 1405 (9th Cir. 1996), overruled on other grounds by In re Bammer, 131 F.3d 788, 792 (9th Cir. 1997)(en banc) -- it is the parties’ intent at the prior time that controls, rather than their current circumstances, In re Combs, 101 B.R. 609 (9th Cir. BAP 1989). Some factors that courts have found relevant to the issue are: If an agreement fails to provide explicitly for spousal support, a court may presume that a so-called "property settlement" is intended for support when the circumstances of the case in-dicate that the recipient spouse needs support. [citation omitted] Factors indicating that support is necessary include the presence of minor children and an imbalance in the relative income of the parties. [citation omitted] Similarly, if an obligation terminates on the death or remarriage of the recipient spouse, a court may be inclined to classify the agreement as one for support. [citation omitted] A prop-erty settlement would not be affected by the personal circumstances of the recipient spouse; thus, a change in those circumstances would not affect a true property settlement, although it would affect the need for support. The court will look also to nature and duration of the obligation to determine whether it is intended as support. Support payments tend to mirror the recipient spouse's need for support. Thus, such payments are generally made directly to the re-cipient spouse and are paid in installments over a substantial period of time. [citation omitted] Shaver (at 1316-17). B. Non-Support Marital Debts A debt other than one for support is excepted from a Chapter 7 discharge pursuant to §523(a)(15) if it ... is incurred by the debtor in the course of a divorce or separation or in connection with a sep-aration agreement, divorce decree or other order of a court of record, a determination made in accord- ance with State or territorial law by a governmental unit .... Subsections (A) and (B) of the statute, respectively, exclude debts from the exception under certain circumstances: where the debtor cannot pay the debt from dis-posable income as defined by the statute, or where the benefit to the debtor of discharging the debt would outweigh the detriment to the creditor from discharging the debt. The legislative history makes clear that this statute was intended to expand the scope of marital debts ex-cepted from discharge, and it is the creditor's burden under this subsection to show that the debt was incurred in connection with a divorce or separation decree and is not a debt for support, see In re Jodoin, 209 B.R. 132 (9th Cir. BAP 1997) (“Jodoin”). If the creditor makes that showing, the burden shifts to the debtor to prove that he meets either the ability test (i.e., is unable to pay) or the detriment test (i.e., discharge of the debt would help the debtor more than it would harm the creditor). Since the two tests are stated in the disjunctive, it is unnecessary to reach the detriment test unless the debtor fails to pass the ability test (i.e., if the debtor proves that he is unable to pay, he prevails without having to address the detriment test). Jodoin (noting that there has been "significant disagreement" among trial courts concerning the issue) holds that the appropriate time to measure the parties' respective financial conditions is the time of trial, not the date of bankruptcy or any other date. Jodoin also holds that the disposable income test of §1325(b) "provides an excellent starting point" for measuring a debtor's ability to pay for purposes of §523(a)(15), but notes concerns of some courts that a debtor may deliberately avoid earning in order to "spite" a former spouse, and cautions (at 142) that "a proper application of the test should take into account the prospective income that the debtor should earn and the debtor's reasonable expenses". C. Standards The Bankruptcy Code is "designed to afford debtors a fresh start, and we interpret liberally its provisions favoring debtors.", In re Bugna, 33 F.3d 1054, 1059 (9th Cir. 1994). The Code's limited ex-ceptions to the general policy of discharge are to be construed narrowly, In re Riso, 978 F.2d 1151 (9th Cir. 1992). The plaintiff in an action for determination of dischargeability under §523(a) bears the burden of proving all elements of the claim(s) for relief asserted by a preponderance of the evidence, Grogan v. Garner, 498 U.S. 279 (1991). III ANALYSIS A. Support Wife contends that Husband’s obligations under the Judgment to pay her automobile insurance and half of her rent up to $200 per month are “actually in the nature of” support within the meaning of §523(a)(5). Husband argues to the contrary. The language of the MSA is ambiguous and contradictory. Paragraph III, entitled “SUPPORT PAYMENTS TO SPOUSE”, favors Husband’s position. It states that, since each spouse is “fully self-supporting”, each party “waives the right to receive spousal support from the other knowing that such waiver is irrevocable”. However, Paragraph VI, entitled “REGULAR EXPENSES” states that, “[i]n consideration of Wife’s waiver of spousal support in paragraph III of this agreement”, Husband agrees to pay certain “regular monthly expenses of Wife”. It is undisputed that those expenses had not already been incurred so as to constitute existing liabilities of the marital community, but were instead expenses that Wife expected to arise in future. Wife testified without contradiction that Husband wanted her to waive support but offered to “pay some bills”, and that Wife asked him to cover the subject expenses because she wanted to be sure that she would be able to meet them. Husband contends that the express and irrevocable waiver of support appearing in Paragraph III of the MSA precludes Wife from asserting now in Bankruptcy Court that she should be permitted to collect support despite her waiver. Husband argues (without citation of authority) that neither party would be able to avoid the mutual waiver under state law, so Husband cannot seek support even though his circumstances have changed and he is disabled and impoverished while Wife is earning income -- he claims that permitting Wife to avoid the waiver by proceeding under Bankruptcy law divests the MSA of “mutuality” on this issue. Husband also contends that, even though the Bankruptcy Court must determine for itself whether a debt is one for support regardless of labels imposed by others, an explicit and irrevocable waiver of support necessarily means that a debt cannot possibly constitute support; Husband cites no authority to that effect, but claims that none of the reported cases involve such a plain and thorough waiver as the one in this matter. Husband is correct that a truly unequivocal waiver of support could perhaps preclude a Bankruptcy Court from treating a debt as support, see, e.g., In re Haines, 210 B.R. 586, 590 (Bkrptcy. S.D.Ca. 1997). The stipulated waiver in that case stated that the bankruptcy debtor’s wife “waives any and all rights to spousal support payments from Husband and understands that such waiver is final and she may never in the future petition any Court for such support” -- there is no mention of the stipulation including any qualifying or contrary provision such as Paragraph VI in this matter, and the debt in issue clearly arose from a division of real property wholly independent of the support waiver. The Bankruptcy Court held, without discussion, that, “[h]aving waived the right to support in a long-since final judgment, [the debtor’s wife] cannot obtain better rights in this court than she did in family court”. However, where a waiver is not so definite and unambiguous, the Bankruptcy Court is left to interpret the parties’ agreement and/or the State Court’s judgment according to the Shaver factors and evidence of the parties’ intent, to determine whether a given debt constitutes support. A stipulated provision purporting to waive support is certainly a relevant and important factor to be considered but, when such a provision is contradicted or called into question by other provisions of the stipulation, the waiver language is not dispositive. Moreover, Paragraph VI expressly provides that Husband agreed to contribute to Wife’s future expenses “in consideration of” Wife waiving support. Elementary principles of contract law render a duty unenforceable if a reciprocal duty is breached, so it is possible that, even if Wife’s waiver in Paragraph III were far more definite than it is, it would nevertheless be unenforceable against her once Husband stopped making the payments that he agreed in Paragraph VI to make. The Court does not reach that issue, which was not raised by the parties. Although Husband testified at trial –- primarily about his current physical condition and his retirement benefits –- he was not asked, nor did he testify, about his intentions when the parties entered into the MSA. He did not testify as to whether he intended, through the MSA, to provide support for Wife. In this case, the waiver of Paragraph III is important, but it is not definite and conclusive, since it must be construed along with the rest of the MSA, including Paragraph VI, and loses much of its force in that process. It is true that, read alone, Paragraph III of the MSA is an explicit and irrevocable mutual waiver of support -- however, Paragraph III cannot be read in isolation because the MSA also includes Paragraph VI, which provides that Husband will pay some of Wife’s expenses “[i]n consideration of” Wife’s support waiver. Wife testified without contradiction that, when Husband asked her to “give up support” while offering to “pay some bills”, she included Paragraph VI in the MSA so as to have Husband help with future expenses in order to “keep my head above water” and “help me get on my feet again”. Taken separately, the two provisions are mutually exclusive because Husband’s contribution to Wife’s future expenses in Paragraph VI cannot constitute anything other than support, yet support is waived in Paragraph III: Husband’s contribution to future expenses cannot be an assumption of existing community liabilities, because the expenses had not yet arisen; nor can his contribution represent an equalization of an otherwise unequal division of community assets or liabilities, because Paragraph V of the MSA expressly provides at subsection A that the parties “knowingly and intelligently waive” any unequal division of assets or liabilities; Further, the division of assets and liabilities appears on its face to be substantially equal: each spouse keeps one vehicle and one checking account; each spouse assumes liability for one credit card and the payments on one vehicle. nor can his contribution be a gift, because his promise to contribute is expressly given “in consideration of” something from Wife rather than being given in exchange for nothing in return. The most logical way that Paragraph III and Paragraph VI can be reconciled is to interpret the mutual waiver as referring to support other than the support called for by Paragraph VI, i.e., each spouse agrees to forgo whatever support may be legally available and replace their respective legal rights to receive support, and their respective legal obligations to pay support, with Husband’s payment of certain future expenses incurred by Wife. According to Paragraph III, the parties’ mutual waiver of support is “irrevocable”, meaning that, regardless of changed circumstances for either spouse, Wife can never seek any support other than Husband’s contributions as provided by Paragraph VI, and Husband can never seek any support at all. Such interpretation is consistent with the correspondence from Husband’s attorney in 1995 and 1996, asking Wife to modify the MSA and eliminate Husband’s contributions under Paragraph VI -- although Husband had become disabled and could not work, he had irrevocably waived any right to claim support from Wife, and the correspondence did not ask for support from Wife but sought merely to relieve Husband of his obligation to provide support in the form of paying some of Wife’s expenses. The MSA was entered into at a time when Husband was working as an automobile mechanic and had been employed for many years in the same field, whereas Wife had been working as a licensed vocational nurse for only about one year after having been employed as a nursing assistant. At that time, Wife’s annual income was higher than Husband’s ($24,000 for her, $18,000 to $20,000 for him), but her job was not “steady” and she was not assured of permanent, full-time work. The parties’ respective financial conditions were roughly equal, but Wife’s employment history was less stable than Husband’s and her position was less secure than his. The payments that Husband agreed to make are for recurring living expenses (automobile insurance premiums and rent), which Wife wanted to be sure she would be able to cover each month. However, it is notable that the MSA does not provide for the payments required by Paragraph VI to cease at any time, even upon Wife’s remarriage or death, which Shaver points out is a typical feature of support. Yet, despite Wife’s testimony that she wanted Husband to help with her future expenses in order to “keep my head above water” and “help me get on my feet again”, Paragraph VI places no limit upon the payments to be made by Husband. There is a reasonable argument that had the payments been intended to function as support for Wife, it is unlikely that they would have been permitted to continue beyond a remarriage, yet the MSA is silent on that point and its plain language would not preclude such a result. The fact that the MSA was prepared by a paralegal and not by an experienced family law lawyer renders it more problematic (although perhaps not impossible) to draw inferences regarding the parties intentions –- especially negative inferences drawn from omissions in the document (e.g., that if the parties had intended for the MSA to provide support for Wife then the payments would likely have ended upon death or her remarriage). In this regard, neither party testified as to whether, at the time of executing the MSA, either of them even thought of, much less discussed, what should happen regarding these payments if Wife remarried or passed away. One could also argue that rather than support, the obligation represented by Paragraph VI should be characterized as a promise to make certain payments in exchange for Wife’s waiver of “support” -- in the legal sense of that word. This Court finds it important that Wife was very credible when she testified that, at the time the parties entered into the MSA, she looked to Husband’s promised payments to her under the MSA to assist her with her living expenses. That testimony is most consistent with construing the MSA as a promise by Husband to make these payments as support. Arguably, it is not inconsistent with construing the MSA as a promise by Husband to make these payments in consideration for her waiver of “support” in the legal sense –- which is what the document says. One could argue that the parties drew a distinction between “support” -– which they both waived irrevocably –- and these promised payments. However, the payments themselves were designed to support Wife in the practical sense of the word. This is a very close case. The result turns on the parties’ intent. The parties’ mutual and irrevocable waiver of spousal support in the MSA supports Husband’s position. But the MSA is ambiguous and the MSA’s language that payments are to be made by Husband “in consideration of Wife’s waiver of spousal support” favors Wife’s position. The fact that the payments that Husband agreed to make are for recurring living expenses (Wife’s rent and automobile premiums), which Wife wanted to be sure she would be able to cover each month, supports Wife’s position. When the MSA was executed, Wife’s employment history was less secure than Husband’s. Under such circumstances, it is reasonable to infer that, after a long marriage during which Husband appears to have been the predominate breadwinner, the parties would intend for Husband to assist Wife by making modest (approximately $279 per month) contributions toward her future routine living expenses, while not intending for Husband to undertake any additional support burden in view of Wife’s recently improved employment situation. Although he testified about other subjects, Husband did not testify at all regarding his intentions with regard to the MSA. Wife’s testimony regarding her intentions with respect to his payments strongly bolsters her position. The fact that the payments have no termination date –- remarriage or death of Wife –-supports Husband’s position somewhat. The payments called for in the MSA, as a practical matter, appear to be for Wife’s support. Under all of these circumstances, the Court concludes that, although this is a very close case, Wife has carried her burden of proof on the issue of support. This Court concludes that the payments required of Husband under Paragraph VI of the MSA were intended by the parties to be, and are in the nature of, support, and are therefore excepted from discharge in bankruptcy pursuant to §523(a)(5). B. Non-Support Marital Debt Wife contends that Husband’s obligations under the Judgment to pay the Citibank Visa account is a non-support marital debt that is excepted from discharge pursuant to §523(a)(15). Under the MSA, Husband agreed to pay this debt as part of the division of community liabilities, and it is undisputed that this debt is not for support and was incurred in the course of the marital dissolution. Pursuant to Jodoin, the burden is Husband’s to show that he is unable to pay this debt. If Husband makes that showing, the debt is dischargeable -- if Husband does not make that showing, he then bears the burden of showing that discharge of the debt would help Husband more than it would harm Wife. The amount of the Citibank Visa account that the Judgment obligates Husband to pay is $2,756.33; Wife took a loan to pay that debt and seeks to recover both the principal amount of the loan and $1,045.48 in finance charges on the loan. Husband has established that he is not able to pay this debt. At time of trial, Husband’s rent was $695 per month and his other living expenses were approximately $500 per month; he and his current wife were living on the wife’s Social Security benefits of $612 per month plus contributions from his mother-in-law when she was able to make them -- Husband was unemployed and could not work until released by his doctors, who were treating him for heart trouble, high blood pressure, and a bad back. With monthly living expenses of approximately $1,200 and monthly income of only $612, Husband was depending upon his mother-in-law to furnish almost half of the modest monthly support required by him and his current wife; Husband will also have to pay the arrears under MSA Paragraph VI of some $11,000, plus the $270 per month that will come due in the future under Paragraph VI. There is obviously no room in such a budget for any amount to be paid toward the Citibank Visa debt of over $3,000. With respect to Husband’s future ability to pay this debt, the outlook is also bleak. It is undisputed that Husband can never return to work as an automobile mechanic and will be able to do only “light” work, which he testified he has not been able to find; Husband was 59 years old at time of trial and lacked training for any job other than that of automobile mechanic. Husband will begin to receive $365 per month from a military pension when he becomes 60 and one-half years old, and will eventually receive Social Security benefits of an unknown amount. Adding the $365 monthly military pension to the $612 monthly Social Security benefits received by Husband’s current wife will yield an income of $977 per month -- that is still $223 per month less than the $1,200 monthly living expenses, and those expenses are more likely to increase with the passage of time than they are to decrease. Husband will receive some Social Security benefits of his own at some point, but there was no evidence of their amount. Husband might also become employed, but that is far from certain given his age, poor health, and lack of training. Based on the evidence, without indulging in speculation, there is no reasonable prospect of Husband’s circumstances improving enough so that he will ever be able to make any payments toward this debt. Under Jodoin, a debtor who lacks the ability to pay need not proceed to the detriment test and show that discharge would help him more than it would harm his creditor. Nevertheless, the Court notes that, if the detriment test were considered here, Husband would prevail. At time of trial, Wife was employed (albeit part-time and without benefits) and earning $18 per hour for a work-week of from 24 to 36 hours -- assuming an average of 30 hours per week, her hourly rate amounts to an annual gross salary of $27,080. There was no evidence of Wife’s total living expenses, but she did not say that she spent more than she earned and she did say that she was making payments on the loan that she had taken to pay the Citibank Visa account, and paying her rent and automobile insurance premiums, which implies that she can afford to make such payments (as she apparently has been doing since Husband stopped contributing in February 1996). There was no evidence of Wife’s age or general health, but she did not testify that she had any difficulty finding or keeping a job, apart from having left one position due to stress. Overall, the evidence supports a conclusion that discharge of these debts would help Husband more than it would harm Wife. CONCLUSION For the reasons set forth above: Husband’s debt for contributions to Wife’s expenses is non-dischargeable as being in the nature of support pursuant to §523(a)(5); Husband’s debt for the Citibank Visa account (and associated finance charges incurred by Wife), and his debt for contributions to Wife’s expenses, are dischargeable as non-support marital debts pursuant to §523(a)(15). Counsel for Wife shall submit a form of judgment so providing, after review as to form by counsel for Husband. Dated: ______________________________ ARTHUR S. WEISSBRODT UNITED STATES BANKRUPTCY JUDGE CANB DocumentsNorthern District of California