WILLIAM A. HILL, Judge U.S. Bankruptcy Court.
By the complaint filed on July 19, 1999, the plaintiff commenced the present adversary proceeding to have a property settlement obligation owed to her by the debtor pursuant to the parties' state court divorce judgment declared nondisehargeable under section 523 (a)(15) of the Bankruptcy Code. Trial was held before the undersigned onNovember 16, 1999.
FINDINGS OF FACT
The parties were married onNovember 6, 1987. Two minor children were born of the marriage — Kyle (age 10) and Luke (age 7). The parties experienced marital problems which ultimately caused them to end their marriage. However, the parties could not agree on various divorce issues, including which party was to have physical custody of their children. On October 3, 1997, after a trial on the unresolved issues, the parties' marriage was dissolved pursuant to a state court judgment. The divorce judgment included a property settlement provision wherein the debtor was ordered to pay $6,548.00 to the plaintiff within 12 months. The divorce judgment also granted the debtor physical custody of the parties' two minor children. The plaintiff appealed the state court divorce judgment, attempting to obtain a reversal of the trial court on the issue of child custody. However, the trial court's custody decision was upheld. Both parties incurred substantial expenses for attorney's fees and costs due to the extensive divorce litigation before the state trial court. and the state appellate court.
The debtor failed to pay his $6,548.00 property settlement obligation by October 1998. inNovember of 1998, the plaintiff brought a motion in state court to enforce the divorce judgment, seeking an order for payment of the property settlement obligation. After a hearing on January 21, 1999, the state court ordered the debtor to pay the $6,548.00 property settlement plus interest within 30 days. On April 13, 1999, the debtor filed a chapter 7 petition in bankruptcy. At the time of his bankruptcy filing, the debtor's property settlement obligation to the plaintiff remained unpaid.
The debtor is a line pilot for Sun Country Airlines. He lives in Grand Forks, ND., with the parties' two children and commutes to the Minneapolis/St. Paul International A.irport for work. As an airline pnot, the debtor is allowed to work no more than 100 hours per month and no more than 1000 hours per year. The debtor testified that he works 75 hours per month on average and is not allowed to obtain a second job. According to the debtor's Schedule 1, which was admitted into evidence, the debtor earns net monthly wages of $4,146.85. In addition, he receives $828.00 per month in child support, resulting in total net monthly income of $4,974.85. The debtor's Schedule J was also admitted into evidence, and that document depicts the debtor's monthly expenses as follows: Home mortgage payment (including real estate taxes) $1,295.00 Electricity and heating fuel 101.00 Water and sewer 40.00 Telephone 122.00 Employment expenses 743.77 Internet service/scheduling 46.00 Cable TV (weather channels) 20.37 Meals while out of town 400.00 Drycleaning uniforms 27.00 Hair Cuts 25.00 Medical expenses 27.40 Lodging at MSP 95.00 Cellular telephone/home calls 83.00 Miscellaneous 20.00 Total 743.77 Home maintenance 90.00 Food 500.00 Clothing 150.00 Laundry and dry cleaning 45.00 Medical and dental expense 100.00 Transportation 300.00 Recreation, newspapers, magazines, etc. 45.00 Charitable contributions 40.00 Homeowner's insurance 35.00 Life 98.00 Auto 148.52 Nanny/child care expenses 620.00 Automobile payments 584.00 Hot lunch program 70.00 Educational books and music lessons 80.00 Miscellaneous out of pocket expenses 60.00 Total 5,267.50 Thus, the debtor's total net monthly income from Schedule I is $292.65 less than the debtor's total monthly expenses from Schedule J.
At trial, the debtor testified as to the basis for the expenses listed in Schedule J. First, the debtor explained that the listed mortgage payment is derived from three separate mortgages on his home. The debtor testified that he used the original mortgage loan to obtain his present home, and that he used the subsequent mortgage loans to consolidate debt and make repairs on the basement. The debtor specifically referred to debt in the form of attorney's fees and costs which had accumulated over the course of the divorce litigation and child custody dispute with the plaintiff The debtor estimated that he incurred total attorney fees and costs somewhere between $45,000.00 and $50,000.
Second, the debtor explained the basis for his monthly child care expenses. He testified that his job as an airline pilot required him to he away from home approximately ten days per month and that the listed expense was for a 24-hour live-in child care provider for the times when he is away.
Third, the debtor explained the basis for his monthly employment expenses. The debtor testified (1) that his expense for internet service was incurred as a requirement of his job for scheduling purposes; (2) that his job required him to incur the cable TV expense in monitoring flight conditions using the weather channels; (3) that his expense for meals out of town was due to the fact that Sun Country often required him to stay over night away from home without reimbursement; (4) that his job required him to incur the listed monthly drycleaning expense to maintain his flight uniforms; (5) that his expense for hair cuts was due to a job requirement that he keep his hair a certain length; (6) that his medical expense was due to a job requirement that he undergo regular physical examinations; (7) that he minimizes his lodging expense by sharing an apartment near the Minneapolis/St. Paul international Airport with several other pilots; and (8) that he incurs the expense for cellular telephone calls in order to keep in touch with his children while he is a way.
The plaintiff cross examined the debtor regarding the appropriateness of several monthly expenses appearing on the debtor's Schedule J. However, no further evidence, was introduced regarding the debtor's monthly expenses or his ability to pay them.
CONCLUSIONS OF LAW
(a) A discharge under section 727, 1141. 1228 (a), 1228 (b), or 1328 (b). of this title does not discharge an individual debtor from any debt —
(15) not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit unless—
(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor. or
(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.
II U.S.C. § 523 (a)(15).
Section 523 (a)(15) "sets up a rebuttable presumption of nondischargeability of any property settlement claim arising out of a divorce which is not of the kind covered by § 523 (a)(5)." Straub v. Straub (In re Straub) 192 B.R. 522, 527 (.Bankr. D.N.D. 1996). The non-debtor spouse has the initial burden of proving that the unpaid obligation is a property settlement not covered by section 523 (a)(5). Id. at 528. Then the burden shifts to the debtor to prove by a preponderance of the evidence (1) that he cannot pay the obligation and still support himself and his dependents or (2) that discharging the obligation results in a benefit to him that outweighs the detriment to his former spouse. Id. Analysis under the first alternative, section 523 (a)(15)(A), includes consideration of the debtor's present ability to pay as well as the debtor's ability to pay going forward into the foreseeable future. Id. at 528-29. Here, the plaintiff has not asked the Court to construe the unpaid obligation as alimony or maintenance under section 523 (a)(5), and both parties concede that the unpaid obligation is a property settlement subject to section 523 (a)(15). Therefore, the burden is on the debtor to prove by a preponderance of the evidence one of the two alternatives discussed above.
In this case, the evidence shows that all of the debtor's income goes toward supporting himself and his two dependents. Even if this Court were to disregard or reduce some of the monthly expenses claimed by the debtor, it is unlikely that he would have the ability to pay the property settlement obligation because his expenses currently exceed his income by nearly $300.00 per month. Furthermore, there is no indication that the debtor's financial circumstances will change significantly in the foreseeable future. Indeed, the debtor testified that the amount of hours he is allowed to work as a pilot are heavily regulated and that he is not allowed to obtain a second job. Although the plaintiff questioned the appropriateness of some of the debtor's monthly expenses, the debtor adequately explained the basis for those expenses, and the Court is satisfied that he has proven his inability to pay the property settlement obligation by a preponderance of the evidence. Therefore, the Court concludes that the debtor's property settlement obligation is dischargeable under § 523 (a)(15)(A). Having ruled in favor of the debtor on the basis of § 523 (a)(15)(A), no analysis of dischargeability under § 523 (a)(15)(B) is necessary.
CONCLUSION
Based on the foregoing, judgment may be entered in favor of defendant Craig A. Rheaume dismissing the complaint of plaintiff Debra A. Rheaume for the reason that the outstanding property settlement obligation of $6,746.91 is held dischargeable under 11 U.S.C. § 523 (a)(15)(A).
JUDGMENT MAY BE ENTERED ACCORDINGLY.
SO ORDERED.