JOHN J. DALIS, Bankruptcy Judge.
Pursuant to notice, the objections by Debtor Robert Edward Holland to the claims of his ex-wife, Diana McCartney, came on for hearing, with McCartney's response.
The chapter 7 Trustee having reported that there is no non-exempt property available for distribution from the estate, the Amended Objections to Claims Number 6 and Number 7 are dismissed. In dismissing the objections, I make no determination as to whether Holland owes any debt to McCartney; the amount of any such debt; whether such debt would be in the nature of alimony, maintenance, or support or would be otherwise related to the parties' divorce; or whether such debt would be excepted from discharge.
This chapter 7 case was noticed first as a no-asset case, then as an asset case, then finally was determined to be a no-asset case conclusively. Thus it has happened that proofs of claim—and objections to claims—were filed notwithstanding that there is no money in the estate to distribute to creditors.
Shortly after the filing of the petition, the Clerk's office issued a standard notice informing creditors of the bankruptcy case, stating that there did not appear to be any property available to pay creditors, and instructing creditors not to file proofs of claim at that time. (Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines, ECF No. 6 at 2.) The notice further stated that if it later appeared that assets would be recovered, another notice would issue, informing creditors that claims would be permitted and establishing a deadline for their filing. (
McCartney then timely filed two claims: one claim in the amount of $12,232.50 ("Claim No. 6"), which she designated as a domestic support obligation ("DSO"); and another claim in the amount of $6476.14 ("Claim No. 7"), which she did not designate as a DSO, but which she stated was based on "Retirement owed re: Dissolution," presumably referring to dissolution of the marriage. (Claims Register, Claim Nos. 6-1, 7-1, filed Mar. 18, 2015.) Holland filed objections to both claims ("Claims"), and it is these objections as amended ("Objections") that are before me now. The Objections were set for hearing on June 11, 2015.
After the hearing was noticed but before it was held, the Trustee determined that the estate had no assets available for distribution. (Chapter 7 Trustee's Report of No Distribution, May 28, 2015.) Consequently, by the time the Objections came on for hearing, this case had been fully administered as a no-asset case. (
I dismiss the Objections, because ruling on them would serve no purpose in this no-asset chapter 7 case. I thus make no determination as to the validity or the amount of any underlying debt. I also make no determination as to whether any or all of such debt would be in the nature of alimony, maintenance or support or would be otherwise divorce-related; or whether such debt would be dischargeable.
An allowed claim in bankruptcy permits the creditor who holds the claim to share in the distribution of assets from the bankruptcy estate.
Where there are no assets to distribute, there also is no purpose served by considering objections to proofs of claim.
Here, although the Trustee believed for a time that there were assets to distribute, the case ultimately was administered as a no-asset case. Thus, even though the Claims were properly filed, neither the Claims nor the Objections serve any bankruptcy purpose now. The Objections are therefore dismissed, leaving unresolved the questions of whether Holland owes McCartney any money and, if so, how much.
A chapter 7 discharge does not include a DSO, defined in part as a debt "in the nature of alimony, maintenance, or support" owed to a former spouse. 11 U.S.C. § 523(a) (5); § 101(14A)(A)-(B). A chapter 7 discharge also does not include divorce-related debts that are not DSOs. 11 U.S.C. § 523(a) (15).
Bankruptcy courts and state courts have concurrent jurisdiction to determine dischargeability under §§ 523(a) (5) and 523 (a) (15). 28 U.S.C. § 1334(b);
Dischargeability of the underlying debt is a separate issue from allowance or disallowance of the claim.
Thus, the dismissal of the Objections here has no bearing on whether the underlying debts, if any, are excepted from Holland's discharge;
There being no purpose served in ruling on objections to proofs of claim in a no-asset chapter 7 case, the Amended Objections to Claims Number 6 and Number 7 are therefore