Can Marital Settlement Agreement Supersede Bankruptcy Discharge?

A commercial contract cannot waive your right to file bankruptcy. A credit card company or a mortgage lender may not enforce a provision in their documents that states you are not permitted to file bankruptcy so as to disqualify your bankruptcy petition. Contractual provisions waiving your right to file bankruptcy are void.

One of my bankruptcy clients presented a slightly different type of contract issues. The client, a man, entered into a marital settlement agreement with his former wife which agreement included a provision that said if a bankruptcy court discharges either party’s obligations under the settlement agreement the bankrupt former spouse agrees to reinstate the contract obligation after the bankruptcy discharge is entered, In other words, the martial settlement agreement does not attempt to prevent either spouse from filing bankruptcy, but rather, it attempts to nullify the effect of the bankruptcy discharge. Marital settlement debts and obligations may be discharged in bankruptcy while alimony and support obligations may not be discharged.

I do not think that a court would enforce this part of the marital settlement agreement. If the bankruptcy court discharges the debtor spouse’s obligations under the Agreement then the debt is discharged notwithstanding the Agreement’s provisions. Actually, if the non-bankrupt spouse attempted to enforce this Agreement provision after the debtor spouse had filed bankruptcy I think the bankruptcy spouse might seek bankruptcy sanctions for a violation of the bankruptcy discharge.

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