In re Ballard

Full title: In re: WILLIAM P. BALLARD, JR., Chapter 7, Debtor. RANDI B. FERRARO…

Court: United States Bankruptcy Court, E.D. Virginia, Norfolk Division

Date published: Jul 17, 2001

Case No. 00-71225-S, APN 00-07041-S (Bankr. E.D. Va. Jul. 17, 2001)

Opinion

Case No. 00-71225-S, APN 00-07041-S

July 17, 2001

Memorandum Opinion and Order

STEPHEN C. ST. JOHN, Bankruptcy Judge

This matter came on for trial upon the Complaint to Deny Disehargeability ("Complaint") of Randi B. Ferraro ("Ferraro") against the debtor, William P. Ballard, Jr. ("Ballard"). This Memorandum constitutes the findings of fact and conclusions of law of this Court pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.

FINDINGS OF FACT

Ballard and Ferraro were married on October 6, 1973. Three children were born of the marriage: Sarah Caulfield Ballard, born March 5, 1975; Carolyn Whitehead Ballard, born August 17, 1978; and William Pierce Ballard, III, born December 15, 1982. Ultimately, marital problems arose and Ballard and Ferraro separated in March 1995. Disputes quickly arose between Ferraro and Ballard as to what their respective financial responsibilities should be going forward. In August 1996 a hearing was held in the Circuit Court of the City of Norfolk, Virginia. The Circuit Court ordered Ballard to pay certain amounts of child support and spousal support. Eventually, Ballard and Ferraro reached agreement as to support and a division of their property, evidenced by their Stipulation and Property Settlement Agreement dated March 18, 1997 ("Stipulation Agreement"). The Stipulation Agreement provided for support in various ways. Ballard agreed to pay Ferraro $915.69 each month as child support until each child of the marriage was either 18 or 19 years old if still a high school student and not self supporting. Ballard also agreed to pay Ferraro $700.00 each month in spousal support until their youngest child attained the age of 23 or graduated from college, whichever first occurred. In addition, Ballard agreed to pay for a variety of future expenses relating to his children.¹ The Stipulation Agreement also required Ballard to pay Ferraro an amount equal to one-half of the value of the individual retirement accounts that Ballard and Ferraro maintained jointly. The Stipulation Agreement further required Ballard to maintain a life insurance policy with at least $ 100,000.00 in death benefits payable to Ferraro and $250,000.00 in death benefits payable to a trust for the benefit of his children. The Stipulation Agreement also provided for the sale of their marital residence, which subsequently occurred. Ballard contracted to be solely responsible for a $15,000.00 line of credit, his personal note to consolidate credit cards which then had an approximate balance of $5970.00, and his other credit card debt. Both Ferraro and Ballard further agreed not to incur any future debts in the name of the other.

1 Ballard agreed to the following: (i) to provide automobile insurance for each child until each child attained age 23, graduated from college or obtained full-time employment, whichever first occurred; (ii) to provide health insurance for each child until each attained the age of 23 so long as he or she was a full-time student; (iii) to pay one-half of all necessary medical and dental expenses of each child not covered by insurance; (iv) to pay one-half of all tuition and associated costs for each child's undergraduate collegiate education; and (v) to be solely responsible for an outstanding indebtedness represented by a "Plus" loan incurred for a portion of his daughter Sarah's collegiate expense and a Stafford loan also incurred by Sarah in connection with her college attendance.

The most complicated provisions of the Stipulation Agreement concerned certain partnership investments of Ballard. Ballard, at the time of the Stipulation Agreement, was a general partner in two partnerships which owned real estate assets: (i) CLASS Associates ("CLASS"), which owned four properties; and (ii) BART Associates ("BART"), which owned two properties, each of which BART leased to Duron Paints. Ballard owned a fifty percent (50%) interest in CLASS and BART.

In the Stipulation Agreement, Ballard and Ferraro agreed that they would share equally in any proceeds in the event the CLASS real estate was sold. The provisions of the Stipulation Agreement concerning BART were more complex. Ballard remains the owner of a fifty percent partnership interest in BART, with Charles T. Lambert ("Lambert") as the owner of the remaining interest in BART. At the time of the Stipulation Agreement, BART owned two commercial buildings. BART constructed the building in Chesapeake ("Chesapeake Property") for Duron Paints, who leased the building initially for a ten-year term. The Stipulation Agreement provided for Ballard to pay Ferraro $2250.00, representing one-half of the distributions Ballard received from BART during 1996. Thereafter, Ballard agreed to pay Ferraro one-half of any distributions that he received from BART, which Ferraro agreed would be considered as her income for tax purposes. The Stipulation Agreement further stated that a purchase option was pending on the Portsmouth property of BART ("Portsmouth Property") and, if exercised, provided for the distribution of $38,376.02 to Ferraro from the net proceeds of the sale.

The controversial provision of the Stipulation Agreement concerns the payment of monies by Ballard to Ferraro as a result of the BART properties. If the then pending option on the Portsmouth Property was not exercised ultimately, then the Stipulation Agreement required Ballard to pay Ferraro an amount equal to 25% of the equity in the BART properties no later than three years after the execution of the Stipulation Agreement, regardless of whether either property had been sold. If both BART properties were not sold within three years of the Stipulation Agreement, then Ballard would be obligated to pay Ferraro an amount equal to 25% of the appraised value of the BART properties at that time. The Stipulation Agreement provided that these proceeds to Ferraro would constitute a property settlement.³ Ferraro testified that this provision was drafted to encourage Ballard to sell the BART properties within the three years following the execution of the Stipulation Agreement. The substantial increase in the amount needed to satisfy Ferraro's claim would operate as a penalty should Ballard tary. Ballard, in contrast, testified that at the time of the execution of the Stipulation Agreement, he believed, and continues to believe, that he was obligated to pay Ferraro only 25% of the equity in the BART properties.

3 Paragraph 11(D) of the Stipulation Agreement provides as follows:

FUTURE BART SALES: If the prospective buyers do not exercise the Option on BART PORTSMOUTH, then Husband shall pay to Wife a sum equal to 25% of the equity in properties owned by BART no later than three years from the date of the signing of this Agreement, whether the properties have been sold or not. Husband shall immediately notify Wife of any change in status of any investment property, i.e., tenant vacancy, offering for sale, etc. If BART PORTSMOUTH and/or BART CHESAPEAKE are sold during the three years, Wife shall receive 25% of the equity realized from the sale, with the outstanding debt on said properties not to exceed the amount of outstanding debt as of the date of the signing of this Agreement. Capital gains shall be paid by each party based on their proportionate share of sums realized from the sale of either property.

If the properties are not sold during the three years, Husband shall pay to Wife 25% of the appraised value of the properties at that time, and Husband shall be responsible for all capital gains tax obligations. The parties shall agree on an MAI appraiser and share in the cost of the appraisal equally. If the parties cannot agree on an MAI appraiser, then both Husband and Wife shall obtain at his or her own expense, an appraisal by an MAI appraiser, other than Henry Thrasher, and the average of those two appraisals shall be the value of the property for purposes of calculating Wife's 25% share. Said proceeds to Wife shall be property settlement.

The Circuit Court of the City of Norfolk, Virginia entered a decree of divorce on May 7, 1997. The decree incorporated and ratified the Stipulation Agreement.⁴ In general, Ballard complied with his obligations contained in the Stipulation Agreement.⁵ For example, BART sold its Portsmouth Property in July 1997, from which Ferraro received an amount from the sales proceeds as provided in the Stipulation Agreement. Similarly, CLASS Associates sold its real property, with Ferraro again being paid in accordance with the Stipulation Agreement. Little progress occurred, however, in the liquidation of the Chesapeake Property.

4 On August 22, 1997 in the Juvenile and Domestic Relations Court of the City of Norfolk, Virginia, a consent decree between the parties reduced the amount of child support that Ballard was ordered to pay Ferraro to a monthly amount of $500.23.

5 Ferraro testified that Ballard had made his monthly support payments and maintained automobile insurance for their children without lapse. A lapse in maintenance of the life insurance occurred in 1997 and in maintenance of the health insurance in 1998, but each default was remedied and insurance maintained as required by the Stipulation Agreement.

BART built the Chesapeake Property expressly for occupation by Duron Paints. The initial lease BART negotiated with Duron Paints was for a period often years, with a three percent rent escalation each lease year. At the time the initial lease term expired, the rent for the Chesapeake Property had increased to $15.00 per square foot. Duron Paints threatened to vacate at the expiration of the lease term, causing the consummation of a lease extension with a five-year term and a square foot rental reduction to $10.00. This rental reduction diminished the monthly distributions made to each of the two BART partners from the partnership's cash flow by one-half to $500.00 monthly.

Meanwhile, on several occasions Ferraro approached Ballard concerning the remaining payment due her under the Stipulation Agreement as measured by the Chesapeake Property. Ballard responded that he would have to deal with it at the end of the three-year period. Ballard testified that he believed that an appraised value of $450,000.00 "seem[ed] right" and that a lien of approximately $340,000.00 encumbered the Chesapeake Property.

The financial circumstances of Ballard and Ferraro at the time of trial are complicated by the fact both have now remarried.⁶ Currently Mrs. Ferraro works as a business development manager for the City of Norfolk, Virginia and her gross annual salary is $44,000.00. Her net salary is $2400.00 monthly. She contributes $100.00 monthly to a retirement plan and $54.16 to a cafeteria benefit plan maintained by her employer. Her remarriage discontinued the spousal support provided for in the Stipulation Agreement. She receives $250.00 as a monthly distribution from BART. Her monthly expenses total $2704.26.⁷

6 Ballard married Margaret Ballard on November 9, 1999. Ferraro married Glen Ferraro on May 28, 2000.

7 Although the Stipulation Agreement clearly obligates Ballard to pay one-half of her son's collegiate expense, it is unclear whether Ferraro is so obligated under its terms to pay the other one-half. Ferraro also owes the United States approximately $4000.00 for taxes she failed to pay on the BART and CLASS distributions she received previously. Likewise, amounts also are owed to the Commonwealth of Virginia for the same reason. The Ferraros expect to pay these tax obligations from an offset of a substantial tax refund they anticipate for their 2000 joint return.
Her monthly expenses may be broken down as follows:

Blue Ridge School (for parties' child, a senior) $1244.26 2 parent loans for Sarah's college education 102.00 IRS 100.00 Virginia Department of Taxation 150.00 Life Insurance 60.00 Car Insurance 53.00 Gas auto maintenance 100.00 Line of credit 75.00 Lunches out 100.00 Prescriptions 60.00 Personal grooming 70.00 Entertainment 100.00 Churchland Psychiatric (for son) 25.00 Medical co-pays 45.00 Charitable contributions 220.00 Miscellaneous personal items 100.00 Miscellaneous household 100.00 TOTAL $2704.26

The listed expense for the Blue Ridge School for Ferraro's son was eliminated as he graduated from high school in May 2001; this expense, however, may be replaced by her son's collegiate expense.

In May 2000 Ferraro married Glen Ferraro ("Mr. Ferraro"). Mr. Ferraro is part-owner of a retail chain of sporting goods and clothing stores. Since his marriage to Ferraro, Mr. Ferraro has paid the rental of $2200.00 monthly for their marital residence and has paid much of the couple's household expenses, including such items as gas, utilities and groceries. Mr. Ferraro enjoyed substantial income in 1999 from his businesses, receiving in excess of half a million dollars, with 1998 being less remunerative but still representing annual income of over $400,000.00. Calendar year 2000 showed a dramatic decrease in income, as Mr. Ferraro's businesses experienced substantial problems which reduced the household income to $171,000.00.⁸ Mr. Ferraro has previously married and divorced, resulting in substantial long-term obligations to his former spouse, including $4000.00 per month in alimony and child support payments and $61,000.00 annually in property settlement payments.⁹ Mr. Ferraro had to liquidate assets to make these domestic payments in 2000. He also anticipates making substantial additional payments to his daughter, who is not expected to be self-supporting in the near term because of medical problems.

8 Ferraro testified that the actual cash her and Mr. Ferraro received was $206,000.00 for 2000.

9 Seven years remain on Mr. Ferraro's property settlement obligation.

Currently Ballard is employed as a commercial property manager. His present wife, Margaret Ballard ("Mrs. Ballard") is employed and has two children living with her from a prior marriage. The Ballards earn a regular income of $8160.52 each month.¹⁰ Their monthly household expenses average approximately $8877.34.¹¹ The Ballards live in an older home that Mrs. Ballard purchased following her divorce in 1999. The house is assessed for real estate tax purposes at $123,000.00. It is encumbered by a first mortgage with an approximate balance of $100,000.00 and a home equity line of credit with an approximate balance of $10,000.00. The home equity line of credit was used to make improvements on Mrs. Ballard's residence.

10 Mrs. Ballard Ballard Current Monthly Gross Income $2452.00 $3666.67 Subtractions: Payroll Taxes ( 850.44) Insurance ( 15.10) United Way ( 21.67) 401K Contribution ( 108.33) Net Pay $2452.00 2671.13 Alimony 1000.00 BART Income 250.00 Car Allowance 250.00 Ballard Fish Oyster[*] 1537.39 $3452.00 $4708.52
[*] Ballard Fish Oyster is a business presently operated by cousins of Ballard. This company pays Ballard $24,000.00 annually for unidentified services.

11 The following is a breakdown of the Ballards' monthly expenses:Total Payments Payments Payments 40.00 40.00

Mrs. Ballard contributes to a cafeteria benefit plan maintained by her employer. One of Mrs. Ballard's children attends a private secondary school. Her former husband contributes $500.00 to $600.00 monthly for his tuition. The school has provided a partial scholarship and Mrs. Ballard pays the remainder of her son's tuition. Ballard currently drives a 1994 automobile, while Mrs. Ballard drives a 1992 automobile in need of some repair.

Ballard is one of ten beneficiaries of an irrevocable trust, which contains approximately $85,000.00 in assets. A separate marital trust exists with assets of an undetermined value, over which Ballard's mother has a power of appointment. The provisions of the will of Ballard's mother concerning exercise of this appointment power or disposition of any of her assets is unknown to Ballard. Ballard testified that if he relinquishes his BART partnership interest, he would forfeit $500.00 in the monthly income he presently receives, but he likewise would cease making monthly payments on the Bank of Hampton Roads loan ($540.45) and the BART partner loan ($500). Finally, by the terms of the Stipulation Agreement, Ballard's monthly child support payment of $500.23 will cease eminently because of his son's graduation from secondary school.

Prior to 1997, Ballard held a number of different employment positions, usually involving commercial property management or financial planning. In 1997 Ballard approached John W. Burns ("Burns"), with whom he had some prior business dealings, concerning the possible purchase of a business known as U.S. Building Service, Inc. ("U.S. Building"). U.S. Building had been in business for a number of years and primarily did industrial painting and waterproofing of buildings. After investigating the books and records of U.S. Building and consulting with various professional advisors, Ballard entered into an agreement with Burns, in which Burns granted Ballard a six-month option to purchase U.S. Building.¹² Ballard had to pay Burns $25,000.00 in cash to obtain the purchase option. To fund the $25,000, Ballard turned to his friend and partner Lambert, pledging to Lambert his BART partnership interest as security for a $25,000 loan. Lambert agreed, as evidenced by a check from Lambert made payable to Ballard and dated August 27, 1997. Lambert and Ballard did not, however, execute a note or other security document.

12 Ballard's due diligence revealed U.S. Building had gross receipts of approximately $500,000.00 annually, with Burns withdrawing $150,000.00 annually in compensation. Even with this withdrawal. Ballard's investigation showed U.S. Building operated at break even or a slight loss with $500,000.00 in annual gross revenue.

Ultimately, Ballard elected to exercise his option to purchase U.S. Building. As to the actual purchase price, Ballard was required to pay Burns an additional $25,000.00 as a down payment, while Burns financed the remainder by accepting a note made by U.S. Building and personally guaranteed by Ballard. For the down payment, Ballard once more turned to Lambert, who lent Ballard an additional $25,000.00, which again was supposed to be secured by a lien in favor of Lambert on Ballard's partnership interest in BART. Again, however, Lambert and Ballard did not execute any written documentation to evidence the loan or any security therefor, except for Lambert's $25,000.00 check to Ballard dated April 1, 1998.¹³

13 On May 12, 2000, with bankruptcy imminent, Ballard executed notes, a security agreement and financing statements to evidence and secure Ballard's indebtedness to Lambert.

Ballard's agreement to buy U.S. Building excluded purchase of its accounts receivable, which were to be transferred to Burns. With no existing accounts receivable available to fund the needed cash flow to operate U.S. Building, Ballard sought financing for a line of credit for the business. Bank of Hampton Roads agreed to provide a line of credit in the amount of $25,000.00 to U.S. Building. As a condition to the line of credit, Bank of Hampton Roads obtained Ballard's personal guaranty and a pledge of his partnership interest in BART. Ballard executed financing statements and a security agreement to evidence his pledge of his BART interest to the Bank of Hampton Roads.

Despite having pledged his partnership interest in BART to two creditors for an indebtedness totaling $75,000.00, Ballard intended to pay Ferraro the remaining amount due her under the Stipulation Agreement ("Remaining BART Debt"). Ballard believed U.S. Building would generate the same level of income that Burns had enjoyed, which would be sufficient to allow Ballard either to pay Ferraro or borrow the monies necessary to pay Ferraro over time. Ballard also believed U.S. Building would generate sufficient income over time to repay Lambert and satisfy any amounts advanced by Bank of Hampton Roads on its credit line.¹⁴

14 Initially Ballard received $37,500.00 from U.S. Building in salary and anticipated another $37,500.00 annually to be available to him from the cash flow of the business. Ballard believed Bank of Hampton Roads could be repaid in one year, Lambert in two years, and he would own U.S. Building debt free in seven years.

Regrettably, instead of being Ballard's financial golden goose, U.S. Building quickly became his albatross. With Ballard unable to generate sufficient new business, U.S. Building began to hemorrhage. In 1998, faced with delinquent tax debt arising from his business and other monetary demands, Ballard borrowed $50,000.00 from family sources. Turning yet again to BART as a financial resource, Ballard began borrowing monies from the partnership, which eventually accumulated to approximately $16,000.00. Although Ballard used his BART distribution to repay some of these partnership loans, Ballard still owes BART $8650.00. Ultimately, nothing could save U.S. Building from its demise, and Ballard closed its doors and surrendered its remaining assets to Burns.

U.S. Building was not the sole source of Ballard's problems, however. In 2000, Ferraro initiated litigation in the Circuit Court of the City of Norfolk, Virginia seeking a finding of contempt against Ballard for, among other alleged omissions, his failure to pay the Remaining BART Debt. Ultimately, the state court entered an order, subject only to this proceeding, concluding that the provisions of paragraph 11(D) of the Stipulation Agreement were "clear and unambiguous and require no explanation or interpretation." Apparently, the court found that the amount Ballard owes Ferraro should be measured not by the equity in the Chesapeake Property but by its appraised value.

Faced with insurmountable debt from the failure of U.S. Building, and its domino effect on Ballard's obligations to Ferraro, Lambert, and Bank of Hampton Roads, Ballard filed a petition for relief under Chapter 7¹⁵ of the United States Bankruptcy Code on July 21, 2000. In his bankruptcy schedules, Ballard scheduled his debt to Burns in the amount of $424,702.60, but listed Ferraro as the holder of an unsecured priority claim in an unknown amount pursuant to a Stipulation Agreement and a Final Decree.

15 Apparently Ballard was ineligible to file under Chapter 13 of the Bankruptcy Code because his total scheduled unsecured indebtedness of $896,973.48 exceeds the maximum permitted under Chapter 13.

In response to Ballard's bankruptcy filing, Ferraro filed this Complaint. After reciting the provisions of the Stipulation Agreement, the Complaint alleged that (i) Ballard was obligated to pay certain medical bills incurred for the benefit of his son, which arose as a result of the lapse of medical insurance; (ii) Ballard had failed to pay two loans relating to his daughter's collegiate education; (iii) additional advances had been taken on a line of credit with SunTrust Bank¹⁶ in violation of the Stipulation Agreement; and (iv) Ballard had failed to pay the Remaining BART Debt owed to Ferraro by reason of the Chesapeake Property. The Complaint further alleged that these amounts owed were nondischargeable pursuant to 11 U.S.C. § 523 (a)(5) ¹⁷ as obligations in the nature of support. Alternatively, under § 523 (a)(15), the obligations should be nondischargeable as a property settlement which Ballard is capable of paying and the discharge of which would not result in a benefit to Ballard that would outweigh the detriment to Ferraro if the debt were discharged.¹⁸ Finally, the Complaint alleges that Ballard's conduct concerning his BART partnership interest, including encumbrance of his interest and his cash withdrawals from BART, has caused willful and malicious injury to Ferraro, therefore excepting from discharge his obligation to pay Ferraro the Remaining BART Debt pursuant to § 523(a)(6).¹⁹

16 At the time of the Stipulation Agreement, SunTrust Bank was known as Crestar Bank.

17 Unless otherwise noted, all code sections from this point forward refer to the Bankruptcy Code as set forth in Title 11 of the U.S. Code.

18 Paragraph 31 of the Complaint states "[t]he discharge of this obligation would result in a benefit to the Debtor that would outweigh the detrimental consequences to Mrs. Ferraro of losing the benefit of the property settlement amount." Despite this language, the actual allegation of Ferraro at trial is that the discharge of this obligation would result in detriment to her greater than the benefit of discharge to Ballard.

19 In Count 3 of the Complaint, Ferraro also alleged Ballard's indebtedness relating to the Chesapeake Property was nondischargeable pursuant to § 523(a)(4), in that his conduct concerning his BART partnership interest breached his de facto fiduciary obligation to Mrs. Ferraro to preserve his share of the parties' equity interest . . . Ferraro abandoned Count 3 at trial and therefore this Court dismissed it.

In his Answer, Ballard admitted that the child support, auto insurance, health insurance and college education expenses were all support obligations. Otherwise Ballard denied that Ferraro was entitled to the relief sought. Ferraro moved for entry of partial summary judgment on Count 1 of the Complaint, contending Ballard had conceded that the following obligations were all support obligations and therefore nondischargeable pursuant to § 523(a)(5): (i) to provide auto insurance and health insurance for his children; (ii) maintain life insurance; (iii) to pay one-half of the tuition and costs of his children's collegiate education; and (iv) to pay the balance on the SunTrust line of credit and the Stafford loan. Ballard agreed, and this Court entered an order granting partial summary judgment and declaring these obligations to be nondischargeable on April 30, 2001.

Given this extensive framework of facts, this Court must now decide if Ballard's obligation under paragraph 11(D) of the Stipulation Agreement shall survive his bankruptcy pursuant to § 523(a)(5) as being in the nature of support, or § 523(a)(6) as a willful or malicious injury, or § 523(a)(15) as an obligation arising under a property settlement agreement.

CONCLUSIONS OF LAW I. IN THE NATURE OF SUPPORT § 523(a)(5)

The greatest benefit bankruptcy affords a debtor is the opportunity for a fresh start, free from his onerous economic burdens. For this reason, Congress delineated only a limited number of exceptions to the dischargeability of debts in bankruptcy, of which bankruptcy courts must construe narrowly. The policy underlying § 523(a)(5), however, "departs from the general policy of absolution or fresh start in order to `enforce an overriding public policy favoring the enforcement of familial obligation.'" Robb-Fulton v. Robb (In re Robb), 23 F.3d 895, 897 (4th Cir. 1994) (quoting Sampson v. Sampson (In re Sampson), 997 F.2d 717, 721 (10th Cir. 1993)); see also Garza v. Garza (In re Garza), 217 B.R. 197, 200 (Bankr. N.D. Tex. 1998) ("Exceptions to dischargeability are generally subject to a narrow construction. However, various courts have ruled that exceptions from discharge for child and spousal support deserve a liberal construction since the policy underlying § 523 (a)(5) favors enforcement of support obligation over a debtor's fresh start."); Zaera v. Raff (In re Raft), 93 B.R. 41, 44 (Bankr. S.D.N.Y. 1988) ("Although a debtor files for bankruptcy to acquire a `fresh start', the interest in a fresh start is a matter of federal bankruptcy policy that Congress considered, but resolved in favor of debtors' spouses when it enacted § 523(a)(5)."). The objecting spouse bears the burden of proving that the claim at issue is "actually in the nature of alimony, maintenance or support." Tilley v. Jessee, 789 F.2d 1074, 1077 (4th Cir. 1986), In re Taylor 252 B.R. 346, 352 (Bankr. E.D. Va. 1999). For the purpose of determining a debt's dischargeability, whether the debt is for support or just a mere property settlement is a matter of federal bankruptcy law. Long v. West (In re Long) 794 F.2d 928, 930 (4th Cir. 1986); In re Taylor 252 B.R. at 352 ("[T]he bankruptcy court must make an independent determination of what constitutes alimony, maintenance or support under federal standards."); Burns v. Burns (In re Burns) 186 B.R. 637, 641 (Bankr. D.S.C. 1992); Grasmann v. Grasmann (In re Grasmann) 156 B.R. 903, 907 (Bankr. E.D.N.Y. 1992); Boyd-Leopard v. Douglass (In re Boyd-Leopard) 40 B.R. 651, 654 (Bankr. D.S.C. 1984). Although federal law controls, state law should not be ignored completely. See Bedingfield v. Bedingfield (In re Bedingfield), 42 B.R. 641, 645 (S.D. Ga. 1983); In re Taylor, 252 B.R. at 352. The parties' intent controls whether the obligation is in the nature of support or is a property settlement. In re Crosby, 229 B.R. 679, 681 (Bankr. ED. Va. 1998) (noting that "[w]hether payments are `in the nature of alimony, maintenance, or support' is determined by the intention of the parties that the payments be for support rather than a property settlement" (citing In re Long, 794 F.2d at 931)); see also In re Garza, 217 B.R. at 200 ("[T]he court is to construe the intent of the parties . . . in creating the obligation and the purpose of the obligation in light of the parties' circumstances at the time of the divorce."); In re Grasmann, 156 B.R. at 908 ("What guides the bankruptcy courts in deciding whether marital obligations [are in the nature of support or a property settlement] is the intent of the state court in fixing the obligation and the purpose of the obligation in light of the parties' circumstances at the time.").

Determining the parties' intent is not an easy task. To make this determination, the Court will consider four general factors: (i) whether, at the time of the agreement, any evidence demonstrates overreaching, (ii) the language and substance of the agreement, (iii) the parties' financial circumstances at the time of the agreement, and (iv) the role of the obligation at the time of the agreement. In re Crosby, 229 B.R. at 681 (citing Catron v. Catron (In re Catron), 164 B.R. 912, 919 (E.D. Va.), aff'd, 43 F.3d 1465, No. 94-1279 (4th Cir. Dec. 21, 1994)).

A. Overreaching

At the outset, the Court dismisses the first factor of overreaching as inapplicable to the facts of this case. In Kettner v. Kettner, No. 91-587-N, slip op. (E.D. Va. Nov. 19, 1991), Judge Clarke stated:

In determining whether a spouse's will has been overborne, the court should consider whether both parties were represented by an attorney, whether the terms of the agreement grossly favor one spouse over the other or leave one spouse with virtually no income, the statements of the spouses in court, the age, health, intelligence and experience of the spouses, the bargaining positions of the parties, whether there were any misrepresentations, and whether the creditor spouse had knowledge of the debtor spouses' weakness or inability to fulfill the terms of the agreement.

Id. at 4, quoted in In re Catron, 164 B.R. at 919. In the instant case, an attorney represented each party at the time the parties entered into the Stipulation Agreement. There is simply no evidence whatsoever in this record of overreaching by either Ballard or Ferraro.

B. Language and Substance of Agreement

Moving to the second factor, the Court must address the actual language and substance of the agreement. See In re Catron, 164 B.R. at 919. In this context, the Court should be cognizant of the context in which the obligation arises under the agreement. See Id.; In re Grasmann, 156 B.R. at 908. For example, a contingency such as whether the obligation terminates upon the death or remarriage of the creditor-spouse is relevant. See In re Catron, 164 B.R. at 919; In re Grasmann, 156 B.R. at 908. Moreover, "[t]he label assigned to a particular payment is a significant factor," In re Grasmann, 156 B.R. at 908, but the court is not bound by the particular label, as it must "look behind the label and determine the true nature of the obligation," In re Garza, 217 B.R. at 201; see also In re Catron, 164 B.R. at 919 ("The label assigned to a particular payment is a significant factor, but not controlling. . . ." (quoting Kettner, No. 91-587-N, slip op. at 2-3)); Boyd-Leopard v. Douglass (In re Boyd-Leopard), 40 B.R. 651, 654 (Bankr. D.S.C. 1984) ("The characterization placed on the award by a state court in the decree is not determinative. The function or purpose which the award was intended to serve or support is the crucial issue."). The method of payment is also probative of whether the debt is in the nature of support. Whether the payment is to be made in a lump sum or over a period of time and whether the payment is to be made directly to the spouse or to a third party are relevant considerations. See In re Catron, 164 B.R. at 918; Baker v. Baker (In re Baker), 146 B.R. 862, 866 (Bankr. M.D. Fla. 1992); Peterson v. Peterson (In re Peterson), 133 B.R. 508, 512 (Bankr. W.D. Mo. 1991). Finally, the tax treatment accorded to the debt may also be significant. In re Peterson, 133 B.R. at 512-13.

Paragraph 28 of the Stipulation Agreement provides ". . . the obligations imposed upon the parties hereunder to make payments to the other shall be considered in the nature of spousal support and shall not be dischargeable by either party." The disputed paragraph 11(D) of the Stipulation Agreement, after obligating Ballard to pay Ferraro 25% of the equity of the Chesapeake Property within three years of the execution of the Stipulation Agreement or 25% of the value of the Chesapeake Property if not sold within three years, succinctly ends with the statement: "Said proceeds to Wife shall be property settlement." Despite the general provision stated in paragraph 28 of the Stipulation Agreement, the addition of this specific provision to paragraph 11(D) demonstrates an intention to limit the generality of paragraph 28.

C. Parties' Financial Situation at Time of Agreement

The third general factor to consider is the parties' financial situation at the time of the agreement. Several variables may inform the Court's analysis, such as the parties' prior work experience and abilities, their physical health, potential earning power and business opportunities, and correspondingly their probable need in the future. See Bedingfield v. Bedingfield (In re Bedingfield), 42 B.R. 641, 647 (S.D. Ga. 1983); In re Grasmann, 156 B.R. at 908; Zaera v. Raff (In re Raff), 93 B.R. 41, 47 (Bankr. S.D.N.Y. 1988). If applicable, the stability of the parties' income at the time of the agreement and whether one spouse has custody of minor children from the marriage are relevant factors to consider. In re Catron, 164 B.R. at 919.

At the time of the Stipulation Agreement in the instant case, Ballard's income was substantially more than Ferraro's income. The Stipulation Agreement, however, contains numerous provisions which obviously were intended to be in the nature of support and address the income disparity between Ballard and Ferraro. Paragraph 11(D), however, equally divides the proceeds of these partnership interests and does not appear to implicate any intended support.

D. Intended Role of Obligation at Time of Agreement

The fourth general factor to consider is the role the obligation was intended to perform at the time the parties entered into the agreement. The statements of the parties in the instant case may be considered in determining the function the obligation was intended to perform. In re Catron, 164 B.R. at 919. Besides their testimony, the court may consider the length of the marriage, who was at fault in the marriage, and if any children were born from the marriage. See Id.; In re Peterson, 133 B.R. at 512; In re Raff, 93 B.R. at 47. In the case sub judice, the marriage produced three children and lasted for a number of years. Irreconcilable differences formed the basis for the decree of divorce.

Whether the debt is for a past or future obligation, allocates debt, or divides property are also relevant variables. In re Peterson, 133 B.R. at 512-13. In the instant case, the Stipulation Agreement contemplates a division of property in percentages, and, at the time of the Stipulation Agreement, was a future obligation. The intended function of this portion of the Stipulation Agreement was to effect an equal division of Ballard's primary assets, specifically his investment in BART and CLASS.

Applying these various factors may differ in light of the particular obligation being analyzed. Courts considering domestic agreements similar to the provisions in paragraph 11(D) of the Stipulation Agreement appear to have reached a common conclusion. An agreement to pay a percentage of proceeds from the sale of property to a former spouse, such as the Stipulation Agreement in the instant case, is not a debt in the nature of support and therefore has been found to be dischargeable under § 523 (a)(5). See Wellner v. Clark (In re Clark), 207 B.R. 651, 656 (Bankr. E.D. Mo. 1997) (holding that a requirement in a divorce agreement for the debtor to sell real property and distribute forty percent of its proceeds to the debtor's former spouse was not in the nature of support under § 523(a)(5)); Mackey v. Kaufman (In re Kaufman), 115 B.R. 435, 441 (Bankr. E.D.N.Y. 1990); Wilburn v. Wilburn (In re Wilburn), 33 B.R. 618, 619 (Bankr. N.D. Ohio 1983).

E. Summary of Factors

The Stipulation Agreement, despite the generality of paragraph 28, appears to have designated the obligation to pay the Remaining BART Debt by Ballard as a property settlement. It is payable in a lump sum and the Stipulation Agreement provides no time limit for its payment.²⁰ Numerous other provisions of the Stipulation Agreement require Ballard to pay amounts to both Ferraro and Ballard's children that obviously are in the nature of support. Ballard's obligation to pay monies to Ferraro under paragraph 11(D) of the Stipulation Agreement and evenly divide the proceeds of Ballard's principal investment assets, however, is not in the nature of support under § 523(a)(5). Therefore, to survive discharge, Ferraro must establish the nondischargeability of the Remaining BART Debt in § 523(a)(6) or § 523(a)(15).

20 The Stipulation Agreement does provide for a substantial increase in the amount of the Remaining BART Debt if not paid within three years of executing the Stipulation Agreement.

II. WILLFUL AND MALICIOUS INJURY § 523(a)(6)

Ferraro alleges that Ballard's conduct concerning the BART partnership interest created a debt caused from willful and malicious injury. Specifically, Ballard's acts following the execution of the Stipulation Agreement, including encumbrance of this interest and his cash withdrawals from BART, demonstrated his intent to subvert and avoid his obligation to pay Ferraro. Based on this allegation, Ferraro concludes that Ballard caused willful and malicious injury, such that the Remaining BART Debt should be nondischargeable pursuant to § 523(a)(6).

Ferraro contends Ballard displayed an animus towards her as soon as they separated by failing to make the mortgage payments on their residence, which caused her financial duress. This hostility continued throughout their separation, she contends, and climaxed when Ballard subjected the BART partnership interest to the claims of Bank of Hampton Roads and Burns. Ferraro believes that encumbering BART in this manner deprived Ballard of his only asset and resource to pay the Remaining BART Debt.

At trial Ballard testified that he believed and continues to believe that the Stipulation Agreement requires the Remaining BART Debt to be measured by the equity in the Chesapeake Property, and not by its value. Apparently Ballard's testimony sparked a new theory of liability under § 523(a)(6) by Ferraro. Because Ballard believed the Stipulation Agreement required the Remaining BART Debt to be measured by the equity in the Chesapeake Property, Ferraro contends Ballard never intended to pay Ferraro the actual amount she is owed under this provision. Accordingly, Ferraro reasons, having never intended to pay Ferraro the "true" amount owed under the Stipulation Agreement, his ultimate failure to pay exhibits an intent to willfully injure Ferraro.

Ballard disagrees, citing his intention to pay Ferraro what he believed he owed her under the Stipulation Agreement by utilizing his salary and anticipated cash flow from U.S. Building to either borrow the necessary monies or to have Ferraro accept periodic payments toward this obligation. Ballard also cites the fact that he made other payments to Ferraro from the sale proceeds of other BART and CLASS properties as proof that he did not intend to injure Ferraro. As further proof, Ballard points to the payments he made on his obligations to his children and to the largely uninterrupted maintenance of insurance coverages.

Section 523(a)(6) provides that an individual debtor is not discharged from any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity." 11 U.S.C. § 523 (a)(6) (2001). The United States Supreme Court dramatically changed the landscape of § 523(a)(6) nondischargeability proceedings in its decision in Kawaauhau v. Geiger, 523 U.S. 57 (1998). Prior to Geiger, the conduct within the reach of § 523(a)(6) was broad. In Branch Banking and Trust Co. v. Powers (In re Powers), 227 B.R. 73 (Bankr. E.D. Va. 1998), this Court explained the prior case law:

Courts focused on both the malice prong and the willful prong of § 523(a)(6). The word "willful" was defined as "a deliberate or intentional act which necessarily leads to injury." In proving intent prior to Geiger, the creditor was only required to show the debtor's act was intentional; there was no requirement to show that the injury was intended. When an act, such as conversion, was done intentionally and produced harm without just cause or excuse, it was willful and malicious for purposes of § 523 (a)(6), without proof of a specific intent to injure. Intent to injure was established by showing that the debtor intentionally performed an act which necessarily caused injury or that was certain to ca[u]se injury.

Id. at 74 (citations omitted). Thus, any intentional act that necessarily caused an injury was not discharged under § 523(a)(6), even if the debtor never intended the resulting injury.

Geiger substantively and dramatically changed this analysis. The defendant physician in Geiger attempted to treat a patient's injured foot. Geiger, 523 U.S. at 59. Notwithstanding existing medical protocols known to Geiger, he elected to prescribe oral penicillin to reduce the treatment cost, rather than prescribing intravenous penicillin. Id. Later, Geiger discontinued treatment because he believed the infection had subsided. Id. Sadly, the less effective treatment coupled with the subsequent withdrawal of any antibiotics failed to curtail infection and the patient's foot was amputated. Id. After a substantial award to the patient in a malpractice action against Geiger, Geiger filed bankruptcy. Id. at 59-60. The patient sought to except his judgment from discharge under § 523(a)(6). Id. at 60.

The Supreme Court concluded that the language of § 523(a)(6) encompassed only acts done with the actual intent to cause injury, and not merely intentional acts that happen to cause injury:

The word "willful" in (a)(6) modifies the word "injury," indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead "willful acts that cause injury." Or, Congress might have selected an additional word or words, i.e., "reckless" or "negligent," to modify "injury." Moreover, as the Eighth Circuit observed, the (a)(6) formulation triggers in the lawyer's mind the category "intentional torts," as distinguished from negligent or reckless torts. Intentional torts generally require that the actor intend "the consequences of an act," not simply "the act itself."

Id. at 61-62 (quoting with emphasis RESTATEMENT (SECOND) OF TORTS § 8A cmt. a (1964)). The Supreme Court feared acceptance of a more expansive interpretation of § 523(a)(6) would stretch the breadth of exceptions to discharge too far:

The Kawaauhaus' more encompassing interpretation could place within the excepted category a wide range of situations in which an act is intentional, but injury is unintended, i.e., neither desired nor in fact anticipated by the debtor. Every traffic accident stemming from an initial intentional act — for example, intentionally rotating the wheel of an automobile to make a left-hand turn without first checking oncoming traffic — could fit the description. A "knowing breach of contract" could also qualify. A construction so broad would be incompatible with the "well-known" guide that exceptions to discharge "should be confined to those plainly expressed."

Id. at 62 (citations omitted).

Decisions shortly after Geiger concluded that § 523(a)(6) required a showing of an intentional tort with a subjective standard of intent. In re Powers is illustrative. The debtor, Powers, obtained a loan from the plaintiff, a bank, and pledged his securities portfolio account maintained at a brokerage institution as collateral for the indebtedness. In re Powers, 227 B.R. at 74. Powers later obtained financing from a second bank to purchase a construction company, which required him to pledge the same securities. Id. When Powers defaulted on the second loan, he delivered possession of the securities to the second bank, who liquidated the account. Id. The plaintiff sought to deny discharge of Powers' debt to the first bank under § 523(a)(6). Id. This Court concluded that the debt was dischargeable in light of Geiger:

Likewise, this Court must apply a subjective standard of intent and determine whether the debtor, Stewart M. Powers, intended to cause injury to the plaintiff, BB T, by delivering his Portfolio Account to First Union when BB T had a prior security interest in the account. First, the Court must examine the intentional acts of the defendant. The defendant stipulated that he directed Paine Webber to deliver his Portfolio Account to First Union without advising BB T. The defendant's transfer of funds was an intentional act done to subordinate the plaintiffs interest in the Portfolio Account to that of First Union. However, the debtor's intentional transfer of the plaintiffs collateral to First Union standing alone is not enough to satisfy the requirements of§ 523(a)(6), when he asserted that the subordination would not injure BB T's chances of being paid in full as he intended to pay its loan off over time. The debtor also expected to pay the First Union loan according to its terms which would have the effect of restoring the collateral to BB T.

. . . .

Clearly, the defendant's act of subordinating the plaintiffs interest in his Portfolio Account was an improper act, but the Court is bound by the subjective intent of the debtor in determining whether the injury to the plaintiff was intended. However, the defendant's intent was to pay the plaintiff the balance due it, even though he subordinated its interest to First Union.

Id. at 76-77; see also Roumeliotis v. Popa (In re Popa), 140 F.3d 317, 318 (1St Cir. 1998) (holding that although an employer's failure to carry worker's compensation insurance was an intentional act that caused injury, it was not done with the actual intent to cause the injury and therefore was dischargeable); Fla. Outdoor Equip., Inc. v. Tomlinson (In re Tomlinson), 220 B.R. 134, 138 (Bankr. M.D. Fla. 1998) (holding that the debtor's failure to turn over inventory proceeds pledged to a creditor to keep the business operative was not an intentional act to cause injury under § 523(a)(6)).

A subsequent case decided by the Fifth Circuit Court of Appeals advocated a slight erosion of this standard. In Miller v. J. D. Abrams Inc. (In re Miller), 156 F.3d 598 (5th Cir. 1998), cert. denied, 526 U.S. 1016 (1999), the court found the label "`intentional tort' too elusive to sort intentional acts that lead to injury from acts intended to cause injury." Id. at 603. Instead, the court concluded that "either objective substantial certainty or subjective motive meets the Supreme Court's definition of `willful injury' in § 523(a)(6)." Id.; accord Baldwin v. Kilpatrick (In re Baldwin), 245 B.R. 131, 136 (B.A.P. 9th Cir. 2000), J. Bowers Constr. Co. v. Williams (In re Williams), 233 B.R. 398, 405 (Bankr. N.D. Ohio 1999).

In an unpublished opinion, the Tenth Circuit Court of Appeals has rejected the substantial certainty approach of the Fifth Circuit, concluding that "the `willful and malicious injury' exception to dischargeability in § 523(a)(6) turns on the state of mind of the debtor, who must have wished to cause injury or at least believed it was substantially certain to occur." Via Christi Reg'l Med. Ctr., Inc. v. Englehart (In re Englehart), No. 99-3339, 2000 WL 1275614, at *3 (10th Cir. Sept. 8, 2000) (unpublished) (rejecting the objective substantial certainty test adopted by Miller as being inconsistent both internally and with Geiger); see also In re Su, 259 B.R. 909, 913 (B.A.P. 9th Cir. 2001) ("The key difference between the Miller and Markowitz holdings is that Markowitz followed the Restatement's requirement that the debtor believe that his actions will with substantial certainty cause injury, while in Miller the subjective belief of the debtor as to the certainty of the harm was not controlling."). Other courts following the subjective formulation first adopted by the Eighth Circuit in Geiger, have scrutinized the debtor's knowledge or belief concerning the consequences of his actions. The Sixth Circuit Court of Appeals has articulated that "the mere fact that [the debtor] should have known his decisions and actions put [the creditor] at risk is also insufficient to establish a `willful and malicious injury.'" Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 465 n. 10 (6th Cir. 1999). Instead, "[h]e must will or desire harm, or believe injury is substantially certain to occur as a result of his behavior." Id; see Mitsubishi Motors Credit of Am., Inc. v. Longley (In re Longley), 235 B.R. 651, 657 (B.A.P. 10th Cir. 1999); Via Christi Reg'l Med. Ctr. v. Budig (In re Budig), 240 B.R. 397, 400-01 (D. Kan. 1999); In re Williams, 233 B.R. at 404.

The Fourth Circuit Court of Appeals has not weighed in on the issue. This Court believes the application of Geiger in Powers correctly directs the inquiry under § 523(a)(6) to an analysis of the subjective state of mind of the debtor — that is, whether Ballard intended the injury claimed by Ferraro, specifically the failure to pay Ferraro the Remaining BART Debt. Identifying the injury complained of is critical to the analysis here. The ultimate wrong Ferraro has suffered is not Ballard pledging his BART partnership interest, but rather is Ballard's failure to pay the Remaining BART Debt. Ferraro does not now and never has had a lien on Ballard's BART partnership interest; rather, the value of the Chesapeake Property is the measure of the amount to be paid. Logically, as his major remaining post-divorce asset, Ballard's BART partnership interest would be the most likely source of payment of the Remaining BART Debt, whether directly through liquidation of the Chesapeake Property or indirectly through obtaining a third-party loan utilizing this interest as collateral. Ferraro, however, has no right contractually to look directly to Ballard's BART partnership interest to liquidate it to satisfy the Remaining BART Debt.

Ballard has convinced this Court that ultimately he intended to pay Ferraro the Remaining BART Debt. Without question, using his BART partnership interest as financial leverage to acquire U.S. Building and fund its operation was a calculated financial risk at best, and perhaps reckless and foolish at worst. By so doing, Ballard did place at risk his most feasible source to pay Ferraro, but, nonetheless, he always intended to pay Ferraro what he believed he owed her pursuant to the Stipulation Agreement. However cavalier his attitude or overconfident his faith in the ultimate financial success of U.S. Building, Ballard's act of pledging his BART partnership interest does not satisfy the mandate of § 523(a)(6) because he did not intend the ultimate wrong claimed by Ferraro-the failure to pay the Remaining BART Debt. Furthermore, the evidence is insufficient to prove that Ballard believed his actions were substantially certain to harm Ferraro by preventing his payment of the Remaining BART Debt. Accordingly, § 523(a)(6) does not bar discharge of the Remaining BART Debt.²¹

21 Ferraro's spontaneous theory of nondischargeability founded upon Ballard's testimony concerning his belief that he was obligated to pay the Remaining BART Debt as measured by the Chesapeake Property's equity even after the third anniversary of the Stipulation Agreement also fails to satisfy § 523(a)(6). As stated earlier, the Court believes Ballard is sincere in his interpretation of the provision controlling the measure of the amount of the Remaining BART Debt. More importantly, Ballard, however misguided as to amount, nonetheless always intended to pay the Remaining BART Debt.

III. PROPERTY SETTLEMENT OBLIGATION § 523(a)(15)

The final basis to potentially hold the Remaining Bart Debt nondisehargeable lies in § 523(a)(15). Prior to 1994, a debtor's obligation entered into pursuant to a divorce or separation agreement was discharged unless the obligation was in the nature of alimony or support. Sparagna v. Metzger (In re Metzger), 232 B.R. 658, 662 (Bankr. E.D. Va. 1999). Concerns over the discharge of property settlement negotiations provoked Congress to broaden the discharge exception and therefore "[s]ection 523(a)(15) [of the Bankruptcy Code] was enacted to protect spouses who had agreed to reduced alimony payments in exchange for being held harmless on joint debts or for accepting a larger property settlement." Craig v. Craig (In re Craig), 196 B.R. 305, 308 (Bankr. E.D. Va. 1996) (citing H.R. REP. No. 103-835, at 54 (1994), reprinted in 1994 U.S.C.C.A.N. 3340, 3363). Section 523(a)(15) provides as follows:

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 —

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 and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; 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;

11 U.S.C. § 523 (a)(15) (2001). While the Bankruptcy Code is generally intended to be "rehabilitative in nature and must be construed strictly in favor of its salutary purpose, debtor relief," Williams v. Holt (In re Holt), 40 B.R. 1009, 1011 (S.D. Ga. 1984), the Code also recognizes, in certain circumstances, debts incurred in connection with separation agreements or divorce decrees are also nondischargeable, In re Baker, No. 99-10575-W, Adv. No. 00-80048-W, 2000 WL 1690314, at *6 (Bankr. D.S.C. Oct. 13, 2000).²²

22 The legislative history of § 523(a)(15) is sparse:

Subsection (e) adds a new exception to discharge for some debts arising out of a divorce decree or separation agreement that are not in the nature of alimony, maintenance or support. In some instances, divorcing spouses have agreed to make payments of marital debts, holding the other spouse harmless from those debts, in exchange for a reduction in alimony payments. In other cases, spouses have agreed to lower alimony based on a larger property settlement. If such "hold harmless" and property settlement obligations are not found to be in the nature of alimony, maintenance, or support, they are dischargeable under current law. The nondebtor spouse may be saddled with substantial debt and little or no alimony or support. This subsection will make such obligations nondischargeable in cases where the debtor has the ability to pay them and the detriment to the nondebtor spouse from their nonpayment outweighs the benefit to the debtor of discharging such debts. In other words, the debt will remain dischargeable if paying the debt would reduce the debtor's income below that necessary for the support of the debtor and the debtor's dependents. The Committee believes that payment of support needs must take precedence over property settlement debts. The debt will also be discharged if the benefit to the debtor of discharging it outweighs the harm to the obligee. For example, if a nondebtor spouse would suffer little detriment from the debtor's nonpayment of an obligation required to be paid under a hold harmless agreement (perhaps because it could not be collected from the nondebtor spouse or because the nondebtor spouse could easily pay it) the obligation would be discharged. The benefits of the debtor's discharge should be sacrificed only if there would be substantial detriment to the nondebtor spouse that outweighs the debtor's need for a fresh start.

H.R. REP. No. 103-835, at 54 (1994), reprinted in 1994 U.S.C.C.A.N. 3340, 3363. Further legislative history may be adduced from the statements of Chairman Brooks as noted in In re Phillips, 187 B.R. 363 (Bankr. M.D. Fla. 1995):

The legislative history of § 523(a)(15) indicates that "[t]his subsection will make [property awards] nondisehargeable in cases where the debtor has the ability to pay them and the detriment to the nondebtor spouse from their nonpayment outweighs the benefit to the debtor of discharging such debts." In application, courts must now determine whether "paying the debt would reduce the debtor's income below that necessary for the support of the debtor and the debtor's dependents . . . [or whether] a nondebtor spouse would suffer little detriment from the debtor's nonpayment of an obligation." Congress cautions, however, that the debtor's discharge should only be denied if the detriment suffered by the nondebtor spouse substantially outweighs the debtor's need for a fresh start.

Id. at 368 (citations omitted) (quoting 140 Cong. Rec. H10752, H10770 (daily ed. Oct. 4, 1994) (statement of Chairman Brooks)).

Section 523(a)(15) is silent on the issue of which party bears the burden of proof in establishing the dischargeability of a debt under this section. Generally, the burden of proof resides with the party opposing the discharge of a debt. Grogan v. Garner, 498 U.S. 279, 285 (1991). As Judge Tice has noted, although some tribunals have "held that the nondebtor spouse bears the burden of not only establishing that the debt stems from a property settlement but must also prove that debtor is not eligible for relief under subdivisions (A) and (B)," In re Craig, 196 B.R. at 308, most courts adopt a bifurcated approach:

An overwhelming majority of courts, however, have used a bifurcated approach; once the nondebtor spouse establishes that the debt arose from a property settlement and that § 523(a)(15) applies, the burden of proof shifts to the debtor to prove that the debtor does not have the ability to pay the debt or that the benefit of discharging the debt outweighs any detriment to the nondebtor spouse. The court agrees with this approach and finds that the burden is on a debtor to prove inability to pay or that benefit of discharge outweighs any detriment to the nondebtor spouse by a preponderance of the evidence.

Id. at 308-09 (citations and footnote omitted); see also In re Crosswhite, 148 F.3d 879, 884-85 (7th Cir. 1998); Gamble v. Gamble (In re Gamble), 143 F.3d 223, 226 (5th Cir. 1998); King v. Speaks (In re Speaks), 193 B.R. 436, 441 (Bankr. E.D. Va. 1995) ("The court concludes, however, that inability to pay or balance of harm in favor of the debtor are affirmative defenses to be raised and proved by the debtor."). But see Morris v. Morris (In re Morris), 197 B.R. 236, 243 (Bankr. N.D. W.Va. 1996) ("Absent express Congressional direction on this issue, the Court is of the opinion that the `fresh start' concept, as well as the generally accepted principle that exceptions to discharge are to be narrowly construed against the creditor weigh heavily in favor of requiring the creditor/plaintiff to ultimately satisfy the elements of § 523(a)(15) before holding a debt of the kind listed in that section to be undischargeable."); Collins v. Hesson (In re Hesson), 190 B.R. 229, 239 (Bankr. D. Md. 1995) (holding that once the nondebtor spouse has met its burden of proving that the debt stems from a property settlement, the burden shifts to the debtor to prove inability to pay, and if the debtor proves inability to pay, then the burden shifts back to the nondebtor spouse to prove that the benefit to the debtor of discharge does not outweigh the detriment to the nondebtor spouse), abrogated by Dexter v. Dexter (In re Dexter), 250 B.R. 222, 224 (Bankr. D. Md. 2000).

Here it is undisputed that the obligation arising under paragraph 11 (D) of the Stipulation Agreement is a debt that Ballard incurred in connection with a separation agreement and a divorce decree and, as the Court has previously concluded, this obligation is not in the nature of alimony or support. Accordingly, Ferraro has sustained her initial burden of proof. It remains to be determined whether Ballard is entitled to relief either pursuant to § 523(a)(15)(A) or (B).²³ A. Ballard's Ability to Pay

23 Section 523(a)(15) provides a disjunctive test: the debtor need only prove either inability to pay or that the benefit to the debtor outweighs the detriment to the plaintiff. In re Metzger, 232 B.R. at 663 (citing 11 U.S.C. § 523 (a)(15)); In re Craig, 196 B.R. at 309; Collins v. Florez (In re Florez), 191 B.R. 112, 115 (Bankr. N.D. Ill. 1995).

The first prong of§ 523(a)(15) requires this Court to measure Ballard's ability to pay the Remaining BART Debt "from income" . . . not reasonably necessary to be expended for the maintenance or support of the debtor . . ." or his dependents. 11 U.S.C. § 523 (a)(15)(A). The language of § 523(a)(15)(A) parallels that of § 1325(b) of the Bankruptcy Code. This parallel has prompted a majority of courts to employ the disposable income test of § 1325(b) to determine if a debtor has the ability to pay under § 523(a)(15)(A). In re Craig, 196 B.R. at 310; Evans v. Evans (In re Evans), No. 00-01456-B, Adv. No. 00-80112-B, 2001 WL 359341, at *3 (Bankr. D.S.C. Jan. 3, 2001); Baker v. Baker (In re Baker), No. 99-10575-W, Adv. No. 00-80048-W, 2000 WL 1690314, at *17 (Bankr. D.S.C. Oct. 13, 2000); Oswald v. Asbill (In re Asbill), 236 B.R. 192, 196 (Bankr. D.S.C. 1999). But see Florio v. Florio (In re Florio), 187 B.R. 654, 657 (Bankr. W.D. Mo. 1995) (applying the § 523(a)(8) "undue hardship" standard); Comisky v. Comisky (In re Comisky), 183 B.R. 883, 884 (Bankr. N.D. Cal. 1995) ("Section 523(a)(8) of the Code is similar to section 523(a)(15) in that it provides for a nondischargeable debt with two exceptions."). The debtor's ability to pay is not determined at any specific point in time but rather the issue is whether the debtor may pay the debt over time. In re Metzger, 232 B.R. at 662; In re Craig, 196 B.R. at 305; McGinnis v. McGinnis (In re McGinnis), 194 B.R. 917, 920 (Bankr. N.D. Ala. 1996); Taylor v. Taylor (In re Taylor), 191 B.R. 760, 767 (Bankr. N.D. Ill.), aff'd, 199 B.R. 37 (N.D. Ill. 1996); In re Florez, 191 B.R. at 115 n. 5.²⁴ Most cases considering a debtor's ability to pay under § 523(a)(15)(A) when the debtor has remarried require inclusion of the new spouses s income in the calculation of "disposable income." In re Gamble, 143 F.3d at 226; In re Leonard, 231 B.R. 884, 888 (E.D. Pa. 1999); In re Asbill, 236 B.R. at 197; Fitzsimonds v. Haines (In re Haines), 210 B.R. 586, 590 (Bankr. S.D. Cal. 1997); In re Morris, 197 B.R. at 243-44; In re Smither, 194 B.R. 102, 108 (Bankr. W.D. Ky. 1996); In re Comisky, 183 B.R. at 884.²⁵ But see Gantz v. Gantz (In re Gantz), 192 B.R. 932, 936-37 (Bankr. N.D. Ill. 1996) (holding that the income of the debtor's new spouse may not be considered in determining whether the debtor had an ability to pay under § 523(a)(15)(A), but under § 523(a)(15)(B) the "extent to which a [new] spouse's contributions or expenses impact on the debtor should be relevant in balancing the equities"); Willey v. Willey (In re Willey), 198 B.R. 1007, 1015 (Bankr. S.D. Fla. 1996) (expressing fears that counting a new spouse's income for purposes of determining a debtor's ability to pay might produce a "chilling effect on the courtship and re-marriage of divorced partners").²⁶

24 Section 523(a)(15) does not suggest the appropriate time for a court to take measure of the debtor's ability to pay. Many courts have determined that "ability to pay" should be determined at the time of trial. In re Evans, 2001 WL 359341, at *2; In re Hesson, 190 B.R. at 237-38. Others suggest the point when the nondebtor files the nondischargeability complaint is the appropriate time. Hill v. Hill (In re Hill), 184 B.R. 750, 754 (Bankr. N.D. Ill 1995). Still others suggest the relevant time is the filing of the bankruptcy petition. Carroll v. Carroll (In re Carroll), 187 B.R. 197, 200 (Bankr. S.D. Ohio 1995). Judge Tice of this Court has rejected these tests as inadequate to address the debtor's ability to pay, and instead has adopted a "totality of the circumstances" test. In re Metzger, 232 B.R. at 663. This judge concurs, as a snapshot image of a debtor's finances fails to take into account changes that may be anticipated, whether negative or positive, in the debtor's financial condition within a reasonable period following the filing of his petition or the time of trial on the nondischargeability complaint. In analyzing whether a Chapter 13 debtor is devoting sufficient monies to satisfy the disposable income test of § 1325, this Court routinely takes into account anticipated changes in the debtor's financial condition during the term of a Chapter 13 plan, such as retirement of installment debt that makes available additional income to increase plan payments. This approach is also consistent wit the notion that the measure of the debtor's ability to pay must be considered over time, rather than in a lump sum.

25 Some courts have held that a bankruptcy court may consider the income of a debtor's live-in romantic companion for § 523(a)(15) purposes whenever the debtor and the live-in companion are economically interdependent or form a single economic unit. See, e.g., Short v. Short, 232 F.3d 1018, 1023 (9th Cir. 2000); In re Crosswhite, 148 F.3d 879, 888-89 (7th Cir. 1998); Halper v. Halper (In re Halper), 213 B.R. 279, 284 (Bankr. D.N.J. 1997); Cleveland v. Cleveland (In re Cleveland), 198 B.R. 394, 398 (Bankr. N.D. Ga. 1996).

26 This Court in Craig v. Craig (In re Craig), 196 B.R. 305 (Bankr. E.D. Va. 1996), has stated "[i]n determining whether [the] debtor has the ability to pay under § 523(a)(15)(A), the court will consider only the income and expenses of [the] debtor." Id. at 310 n. 3 (citing Carter v. Carter (In re Carter), 189 B.R. 521, 522 (Bankr. M.D. Fla. 1995)). This judge respectfully disagrees and it would appear a majority of decisions since Craig have held that a new spouse's income and expenses should be included to calculate a debtor's ability to pay under § 523 (a)(15)(A). As a practical matter, however, whether Mrs. Ballard's income and expenses are included does not alter this Court's ultimate conclusion of Ballard's ability to pay under § 523(a)(15)(A). See infra note 32.

Application of the disposable income test does not require blind acceptance of a debtor's budget:

Under the section 1325(b) analysis courts do not ordinarily re-adjust a debtor's expenses unless the debtor has included luxury items that do not qualify as reasonably necessary. While section 1325(b) may provide guidelines for a section 523(a)(15)(A) analysis, a comparable deference to the debtor's list of expenses is not warranted under section 523 (a)(125)(A).

In re Metzger, 232 B.R. at 664 (citations omitted). At first blush, a review of Ballard's evidence adduced at trial would appear to indicate an inability to pay the indebtedness remaining under the Stipulation Agreement. The Ballards list monthly income of $8160.52 and expenses of $8877.34, suggesting a deficit of approximately $700.00 each month in meeting their household expenses. More careful analysis of their monthly expenses, however, indicates that Ballard continues to pay potentially discharged debt.²⁷ This practice clouds the true analysis of his present and anticipated finances. For example, Ballard continues to pay monthly $540.45 on the Bank of Hampton Roads indebtedness secured by his partnership interest in BART and $500.00 a month on partnership loans advanced by BART. Ballard continues to pay these amounts, even though they will be discharged potentially, to protect and retain his partnership interest in BART.²⁸ Should Ballard forfeit his interest in BART and cease paying these debts, $1040.45 monthly would be available to pay the Remaining BART Debt under the Stipulation Agreement, offset only by the loss of $250.00 in monthly income now received from BART, which would vanish should payment on these debts desist. See In re Gamble, 143 F.3d at 226 (holding that the bankruptcy court was not in error in finding an ability to pay when the debtor "had been voluntarily making payments on a dischargeable debt to his father . . ."). Ballard also continues to pay the Crestar (now SunTrust) loan 9009 guaranteed by Ballard's cousins, consuming $550.00 monthly, which indebtedness is also dischargeable if Ballard receives his discharge.²⁹ Ballard continues to pay this indebtedness to protect the $2400.00 he receives monthly from Ballard Fish Oyster. Even accepting Ballard's reasoning that paying out this indebtedness is necessary to protect his income stream from diminution, Ballard should retire this obligation in approximately six months.

27 The Court notes that currently Burns has pending before this Court a Complaint to deny Ballard's discharge, which allegations consist largely of complaints by Burns that Ballard concealed or failed to disclose assets. A trial on this Complaint is scheduled for September 25, 2001. Ballard will discharge this substantial amount of debt if Burns' Complaint fails.

28 Ballard's Chapter 7 Trustee has not abandoned Ballard's interest in BART. nor has he elected to administer it.

29 This indebtedness has a remaining balance of $3273.29 according to Ballard's exhibit number 40.

In addition to these amounts, Ballard contributes $100.00 monthly to a 401K retirement plan, an expense generally not allowed by this Court in the context of a § 1325 determination of disposable income. Ballard also continues to pay $200.00 monthly to his prior divorce attorney and now owes $20,000.00 to his bankruptcy counsel. The fees to Ballard's prior counsel, even if incurred postpetition in matters relating to the Stipulation Agreement in state court, nevertheless likely will be paid in full within thirteen to fourteen months. The amounts now owed to Ballard's bankruptcy counsel are not properly considered in an analysis of Ballard's ability to pay. As Judge Tice noted in Metzger:

Initially, the court notes the debtor included in his monthly expenses $750.00 in payments to his attorneys for fees arising from this litigation. The statute speaks of expenses for the support and maintenance of the debtor and dependents of the debtor. While attorney fees may constitute a debt owed, they are not reasonably necessary for support or maintenance of the debtor and his dependents. This conclusion is further supported by analogy to section 1325(b). When a debtor calculates disposable income in chapter 13, debts such as attorney's fees are not taken into consideration, as they are to be paid off through the administration of the estate with the disposable income calculated. Accordingly, attorney's fees do not constitute expenses reasonably necessary to the debtor or his dependents' support or maintenance and will not be considered in addressing a debtor's ability to pay.

In re Metzger, 232 B.R. at 664 (citation omitted).

Accordingly, the Court finds that excluding the payment of debts to be discharged, attorney's fees, and Ballard's 401K retirement outlay, reduces Ballard's expenses by at least $1890.45 monthly, offset only by the loss of $250.00 each month in income from the BART partnership. This results in a net available income to pay Ferraro of $1640.45.³⁰ Even assuming the monthly deficit reflected in the Ballards' household budget is depicted accurately at $716.82, these exclusions indicate that Ballard has an ability to pay at least $923.63 each month.³¹ Ballard therefore has not sustained his burden of proving that he is unable to pay Ferraro the Remaining BART Debt.³² B. Balancing Benefits and Detriments

30 Ballard's monthly budget also includes his child support payment of $500.23, which obligation was discharged in May 2001 under the terms of the Stipulation Agreement. This additional $500.23 of monthly income may be offset in full or in part by Ballard's requirement to pay one-half of his son's collegiate expenses, although Ballard's mother paid some or all of his daughter's collegiate expenses. Because the Court has found substantial available monthly income, the Court will assume that for the next few years this collegiate expense will consume the savings from the termination of child support.

31 The Court reaches this conclusion without massaging any of the amounts listed as household expenses, because the Court has found substantial available monthly income to pay Ferraro.

32 Ballard's schedules I and J filed at the time of his bankruptcy include only his income and expenditures and lists monthly income of $5069.45 and expenses of $3506.89, for a net surplus monthly of $1552.56. Accordingly, the decision to include Mrs. Ballard's expenses and income does not materially alter the Court's conclusion that Ballard has the ability to pay Ferraro whether Ballard's income and expenses are viewed singly or in combination with Mrs. Ballard's income and expenses.

Even if the debtor is found to possess the ability to pay, § 523 (a)(15)(B) of the Bankruptcy Code allows a marital debt to be discharged if the benefit to the debtor outweighs the detriment to the former spouse. Ultimately, "an assessment of benefit and detriment under the second exception implicates an analysis of the totality of the circumstances, not just a comparison of the parties' relative net worths." In re Gamble, 143 F.3d at 226; see In re Metzger, 232 B.R. at 665. Clearly the relative income and expenses of both parties are important factors review. In re Metzger, 232 B.R. at 665. The health, job skills, training, age and education of the parties and their dependents, any special needs which they may have, and a comparison of the parties' post-bankruptcy obligations are also relevant factors. Morris v. Morris (In re Morris), 197 B.R. 236, 245 (Bankr. N.D. W. Va. 1996). The decision in In re Smither, 194 B.R. 102 (Bankr. W.D. Ky. 1996), suggests consideration of an even more expansive list of factors in balancing whether the detrimental consequences to Ferraro are outweighed by the benefit of Ballard's fresh start:

1.) The amount of debt involved, including all payment terms;

2.) The current income of the debtor, objecting creditor and their respective spouses;

3.) The current expenses of the debtor, objecting creditor and their respective spouses;

4.) The current assets, including exempt assets of the debtor, objecting creditor and their respective spouses;

5.) The current liabilities, excluding those discharged by the debtor's bankruptcy, of the debtor, objecting creditor and their respective spouses;

6.) The health, job skills, training, age, and education of the debtor, objecting creditor and their respective spouses;

7.) The dependents of the debtor, objecting creditor and their respective spouses;

8.) Any changes in the financial conditions of the debtor and the objecting creditor which may have occurred since the entry of the divorce decree;

9.) The amount of debt which has been or will be discharged in the debtor's bankruptcy;

10.) Whether the objecting creditor is eligible for relief under the Bankruptcy Code; and

11.) Whether the parties have acted in good faith in the filing of the bankruptcy and the litigation of the § 523(a)(15) issues.

Id. at 111. It should be noted that various considerations relied upon by courts pondering the balance of detriment and benefit reflect the fact that so many of these cases are indemnity based and do not, as here, involve payment of a large sum of money from one spouse to another.³³ The Smither court has summarized the balancing test as a "lifestyle comparison":

33 For example, factors considered in Morris include "[t]he amount and nature of the debt involved and whether the nondebtor spouse is jointly liable on the debt" and "[w]hether the objecting creditor is eligible for relief under the Bankruptcy Code." In re Morris, 197 B.R. at 245. This Court's decision in Metzger suggests consideration of additional factors such as "whether the nondebtor spouse is jointly liable on the debts, the number of dependents, the nature of the debts, the reaffirmation of any debts, and the non-debtor spouse's ability to pay." In re Metzger, 232 B.R. at 665.

This court believes that the best way to apply the 11 U.S.C. § 523 (a)(15)(B) balancing test is to review the financial status of the debtor and the creditor and compare their relative standards of living to determine the true benefit of the debtor's possible discharge against any hardship the spouse, former spouse and/or children would suffer as a result of the debtor's discharge. If, after making this analysis, the debtor's standard of living will be greater than or approximately equal to the creditor's if the debt is not discharged, then the debt should be nondischargeable under the 523(a)(15)(B) test. However, if the debtor's standard of living will fall materially below the creditor's standard of living if the debt is not discharged, then the debt should be discharged under 11 U.S.C. § 523 (a)(15)(B).

Id.

A threshold concern for this Court is whether any consideration should be given to Mr. Ferraro's and Mrs. Ballard's income and expenses in balancing the benefit to Ballard and the detriment to Ferraro should the Remaining BART Debt be discharged. In most cases in which the nondebtor spouse has remarried, the courts have concluded, for purposes of § 523 (a)(15)(B), that consideration of the financial circumstances of the spouses of the debtor and the nondebtor spouse is relevant. See, e.g., Oswald v. Asbill (In re Asbill), 236 B.R. 192, 197 (Bankr. D.S.C. 1999) ("In making this determination [under § 523(a)(15)(B)], the Court believes the relative income, expenses, and worth of the new spouses of the parties is relevant."); Turner v. McClain (In re McClain), 227 B.R. 881, 886 (Bankr. S.D. Ind. 1998); Celani v. Celani (In re Celani), 194 B.R. 719, 721 (Bankr. D. Conn. 1996) ("Where the debtor and/or the debtor's former spouse have remarried, the financial circumstances of the new spouses logically and sensibly should be included in the balancing test set forth in § 523(a)(15)(B)."). Counsel for Ferraro has suggested that including Mr. Ferraro's financial circumstances among the totality of considerations for this Court pursuant to § 523(a)(15)(B) would be a return to the thinking of medieval times. Moreover, given the fact that the Ferraros' marriage is a second nuptial event for both, this Court is urged to consider what counsel contends is the high failure rate of second marriages in modern America. This Court is unaware of the differential, if any, in the rate of dissolution of first, second or subsequent marriages; the only certainty is that presently the rate of divorce for all marriages is regrettably frequent. There was no evidence at trial that either the Ballards or Ferraros contemplated anything other than remaining, respectively, as household economic units. Both remarriages are recent but, again, nothing adduced at trial would lead the Court to conclude that the current economic co-dependency of both Ballard and Ferraro upon their new spouses will subside in the foreseeable future. Having previously concluded that Mrs. Ballard's financial circumstances are relevant to determining Ballard's ability to pay, it seems fairness likewise dictates the inclusion of both new spouses' financial capabilities and liabilities as considerations in weighing the benefit of discharge of the Remaining BART Debt to Ballard against the detriment to Ferraro should discharge of this debt occur.

The factual circumstances of the Ballards and Ferraros appear to provide a unique footing to conduct a balancing equation under § 523 (a)(15)(B). A review of their finances reveals both a former spouse and a debtor who enjoy a standard of living substantially in excess of most Americans. Despite the financial calamity engendered by the failure of U.S. Building, Ballard has successfully placed himself in a position similar to that which he occupied prior to his entrepreneurial debacle. With his remarriage to Mrs. Ballard, their combined household income is approximately $98,000.00 annually, which is a sum far in excess of the annual income of all but a handful of debtors who seek bankruptcy relief from this Court. While divorce and bankruptcy have stripped Ballard of most of his physical assets, the Ballards are employed and capable of incomes sufficient to support a comfortable lifestyle materially in excess of that enjoyed by most in this community. Obviously, a significant portion of Ballard's income is generated by the largess of family members, but nothing at trial suggested this generosity had reached its end. It is certainly true that some substantial financial burdens remain for Ballard due to his conceded obligations to repay some remaining loans from his daughter's collegiate education and to pay for one-half of his son's post-secondary educational expenses. However daunting now, these support expenses are finite and, after their satisfaction, Ballard will be relieved of any dependency by his children. Mrs. Ballard will be well-occupied financially by her children's dependency likely for a period longer than Ballard, but she testified that she has received substantial assistance from her parents in funding in full a prepaid tuition assistance plan for one or both of her children.³⁴ Finally, as the Court has determined previously, application of the disposable income test to Ballard's financial circumstances indicates that he has at least $923.63 available monthly to pay Ferraro. Although Ballard's financial circumstances may not be envious to some, nevertheless he appears to have survived divorce and liquidation bankruptcy with his lifestyle largely intact.³⁵

34 The testimony reveals that Mrs. Ballard's son received help from his grandparents for the prepaid tuition plan; whether the assistance is from Mrs. Ballard's parents or the parents of her former spouse is unclear.

35 Indeed, Ballard's testimony would appear to indicate that, with the possible exception of BART, whose fate remains undetermined in the hands of Ballard's Chapter 7 Trustee, Ballard's loss of physical assets, such as his former residence, resulted not from his bankruptcy filing but rather from his divorce and property settlement with Ferraro.

Ferraro likewise appears to have escaped her divorce from Ballard with her living standard unaltered or perhaps even elevated. Ferraro now earns substantially more than she did from her prior employment during her marriage to Ballard as a real estate appraiser.³⁶ Ferraro lives in a rented personal residence, which is a waterfront property. Her new husband, Mr. Ferraro, is a successful business owner. Their combined family income even in its depressed state experienced in the year 2000 is substantial and exceeds the family income of Ballard and most Americans, for that matter. Mr. Ferraro has graciously paid most of their household living expenses since their marriage while Ferraro was strapped by the additional expense of her son attending a non-local private school. Mr. Ferraro's continued income level may be more speculative than that of any of the other parties because of the retail nature of his business and the inherent entrepreneurial risk he has assumed. What is not speculative, however, is the certainty of the massive court mandated domestic financial obligations that Mr. Ferraro must bear now and for many years to come. His payments to his former spouse are an awesome and unchanging debt not subject to the ebb and flow of Mr. Ferraro's business success and the willingness of Mr. Ferraro's business partners to permit substantial case withdrawals from their enterprises. Mrs. Ferraro's remaining tax obligations arising from the liquidation of CLASS and BART assets now will be retired fortuitously by being setoff against a portion of Mr. Ferraro's substantial income tax refunds he eminently anticipates. Except for some remaining loans for one of her daughter's collegiate education,³⁷ a remaining unpaid medical bill for her son³⁸ and her uncertain obligation, if any, to fund one-half of her son's collegiate education under the Stipulation Agreement, the graduation of her son from private secondary school frees her of any dependency expense.³⁹

36 Ferraro testified that at the time of her separation from Ballard she was earning $18,000.00 annually; she currently makes $44,000.00 each year by reason of her employment with the City of Norfolk as a business development manager.

37 Ferraro lists the monthly expense for these loans as $102.00. (Def's Ex. 6.)

38 Ferraro lists the monthly payment for this obligation as $25.00. (Def.'s Ex.6.)

39 Paragraph 14 of the Stipulation Agreement speaks initially only of Ballard's obligation to pay one-half of the tuition and associated costs for their children's undergraduate collegiate education, but then states "[b]oth parties shall make payments directly to the institution or child, as applicable" and "[w]ife shall provide proof of payment of said associated costs along with notice to Husband."

As to other considerations, it appears the Ballards and Ferraros are of the same approximate age, enjoy good health, are well-educated and successful in their employment. With the exception of the business risk inherent in Mr. Ferraro's enterprise, all of these parties appear likely to continue their employment and incomes at their existing or increased level for the foreseeable future. Except for Mr. Ferraro's substantial domestic obligation and Ballard's remaining education related obligations, the parties and their spouses appear to have no large financial obligations other than normal living expenses for shelter, food, clothing and transportation, which virtually all citizens must suffer. By his bankruptcy Ballard potentially will discharge a substantial amount of debt, most arising from Ballard's operation of U.S. Building or from family sources. No proper consideration is given to Ferraro's eligibility for relief under the Bankruptcy Code, as her financial circumstances indicate no necessity that she contemplate personal bankruptcy at any time in the near future. Finally, it appears to the Court that the parties have acted in good faith, both in Ballard's filing of the bankruptcy and in Ferraro's filing of the instant Complaint.

A somewhat troubling consideration is the amount of the Remaining BART Debt and the absence of any agreed payment terms for retirement of this obligation. Ballard appears to believe sincerely that he was and is obligated to pay Ferraro an amount measured by the equity in the Chesapeake Property.⁴⁰ His decision to defer serious consideration of how to pay this Remaining BART Debt until the three-year hiatus provided for in the Stipulation Agreement expired is doubtless a tragic miscalculation. Nothing in the record betrays whether this misconstruction of the critical language of the Stipulation Agreement was self generated by Ballard or the result of professional misdrafting or misinterpretation. Regardless of the source of this dilemma, the plain language of paragraph 11(D) of the Stipulation Agreement has closed the window of opportunity for Ballard to satisfy this marital obligation by the payment of an amount equal to one-fourth of the equity in the Chesapeake Property. The language of paragraph 11(D) of the Stipulation is plain and unambiguous to this Court in its provision that, after the expiration of three years after execution of the Stipulation Agreement, Ballard's obligation increased to require payment to Ferraro of one-fourth of the appraised value of the Chesapeake Property as determined by an appraisal or appraisals to be obtained by Ballard and Ferraro. The Virginia state court apparently agrees with this conclusion.⁴¹

40 See supra Part II.

41 The Circuit Court of the City of Norfolk so ruled on February 20, 2001. (Pl.'s Ex. 65.)

The Stipulation Agreement expressly provides that the value of the Chesapeake Property shall be determined by either Ballard and Ferraro agreeing on an appraiser and sharing the expense equally, or each obtaining an appraiser at their own expense and determining an average from the values indicated by the appraisals. There is insufficient evidence before this Court to determine the amount of the Remaining BART Debt under these requirements. Ferraro attempted to introduce an appraisal, but elected not to procure the presence at trial of the appraiser.⁴²

42 Ballard objected to the introduction of this appraisal on the basis of hearsay. and the Court sustained Ballard's objection. Even assuming the hearsay objection was sustained improperly, Ferraro offered insufficient evidence to prove that Ballard and Ferraro had agreed that this appraisal was adequate to establish the value of the Chesapeake Property for the purposes of paragraph 11(D) of the Stipulation Agreement.

Although Ballard testified that $450,000.00 "sounded all right" as the value of the Chesapeake Property, this falls far short of the appraisal requirement of paragraph 11(D) of the Stipulation Agreement. While this Court is unable to determine the value of the Chesapeake Property from the evidence at trial, it is plain from the contractual language agreed to by Ferraro and Ballard that the measure of the Remaining BART Debt is the value of the Chesapeake Property, with no deduction for any indebtedness thereupon. Assuming, arguendo, that $450,000.00 is the value of the Chesapeake Property, the Remaining BART Debt that Ballard has obligated himself to pay is a substantial $112,500.00.

The uniqueness of the financial circumstances of the Ballards and Ferraros greatly complicates the Court's measure of benefit and detriment. Never in this judge's experience and apparently rarely in the reported decisions under § 523(a)(15) is there in evidence not only a nondebtor spouse who enjoys substantial family income, but a debtor and a spouse whose income is nearly $100,000.00 annually. The case law suggests this balancing test is far more often applied to the circumstances of a debtor whose expenses exceed his income or a nondebtor spouse whose finances cause the court to marvel how he or she has heretofore avoided the necessity of bankruptcy relief The few decisions that have contemplated those rare, non-impecunious debtors suggest the answer to this Court's dilemma may reside in the consideration of what properly may constitute "benefit" to the debtor under § 523 (a)(15)(B). In Brasslett v. Brasslett (In re Brasslett), 233 B.R. 177 (Bankr. D. Me. 1999), the court initially concluded under § 523 (a)(15)(A) that the debtor had the ability to pay a $90,000.00 property settlement award to his former spouse. Id. at 184. After concluding discharge of the $90,000.00 obligation would "deprive [the non-debtor spouse] of [the] funds she needs to live decently and independently," id. at 185, the court considered the benefit to the debtor of discharging this obligation:

On the other side of the § 523(a)(15)(B) scale, I have already concluded that Ronald [the debtor] has the ability to pay this obligation going forward. While Ronald would obviously benefit from discharging a $90,000.00 obligation, the opportunity to increase his discretionary disposable income is not the kind of benefit that carries much weight.

Id. at 185-86; see also Taylor v. Taylor (In re Taylor), 191 B.R. 760, 766 (Bankr. N.D. Ill.), aff'd, 199 B.R. 37 (N.D. Ill. 1996); Florio v. Florio (In re Florio), 187 B.R. 654, 658 (Bankr. W.D. Mo. 1995); Carroll v. Carroll (In re Carroll), 187 B.R. 197, 201 (Bankr. S.D. Ohio 1995). As Judge Waites aptly cautioned in Oswald v. Asbill (In re Asbill), 236 B.R. 192 (Bankr. D.S.C. 1999):

Rather than adopting a per se rule under which the party with the higher income or standard of living loses under § 523(a)(15)(B), the Court must weight the needs of the parties and balance the equities under the specific facts of each case. In this case, the evidence indicates that if this debt is not discharged, the Debtor should be able to meet his living expenses without detriment to his family or the lowering of his standard of living.

Id. at 198.

Here the only discernible benefit to Ballard of discharging the Remaining BART Debt is not having to pay Ferraro the value of the Chesapeake Property and thereby increasing his discretionary disposable income by whatever amount he is ordered to pay Ferraro ultimately, monthly or otherwise. While Ferraro's circumstances are rosier than those of the nondebtor spouse in Brasslett, ultimately payment of the Remaining BART Debt would provide her with more funds to live independently of the largess of her new husband. This detriment is far from overwhelming, of course, but then neither is Ballard's deprivation of additional discretionary disposable income of great moment. Furthermore, "[l]oss of funds by a creditor may be a significant detriment to prevent the discharge of a debt, where the debtor can not demonstrate that he or she will receive a benefit which outweighs the detriment." In re Smither, 194 B.R. 102, 111 (Bankr. W.D. Ky. 1996).

These sui generis circumstances of relatively affluent debtor and new wife and affluent former spouse and new husband compel this Court to search deeply for the legislative intention of § 523(a)(15)(B). Here where a debtor likely will enjoy the benefits of extinguishment of hundreds of thousands of dollars of justly incurred indebtedness,⁴³ where the debtor and his new spouse enjoy an annual income of nearly $100,000.00, and where the debtor appears to be sounder financially after receipt of his discharge than at the time he originally incurred the obligations of the Stipulation Agreement, it appears contrary to the intent of the Bankruptcy Code, and specifically § 523(a)(15), to liberally exercise this Court's authority to negate the Remaining BART Debt. Failure to allow the discharge of the Remaining BART Debt will not alter Ballard's lifestyle materially. Notwithstanding the affluence of Ferraro's lifestyle, Ballard has failed to carry his burden to convince this Court that the benefit to Ballard of discharging the Remaining BART Debt exceeds any detriment to Ferraro should discharge be permitted.⁴⁴ See Id. at 111-12 ("[T]he Debtor will not be driven to a significantly lower standard of living by paying this debt. On the other hand, the Creditor will suffer little, if any, detriment if this debt is not paid. As this Court finds that the parties' standards of living are approximately equal, regardless of whether this debt is discharged, this Court holds that the debtor has failed to show that the benefit of a discharge of this debt outweighs the detriment to the Creditor which would arise if the discharge is granted. . . ."); In re Florio, 187 B.R. at 657 (noting that when there is equal harm, or lack of harm, a debt is nondischargeable under § 523(a)(15)(B)). Rather, it appears to this Court to be consistent with the provisions of § 523(a)(15)(B) to leave Ballard and Ferraro in the position they originally elected to occupy by reason of the Stipulation Agreement. Ballard will still enjoy the substantial other benefits he will receive if ultimately granted the discharge of his substantial remaining prepetition indebtedness. Notwithstanding this conclusion, however, a final issue must be addressed, that being whether the Court is authorized to order a partial discharge of the Remaining BART Debt and whether the totality of the circumstances here render it prudent to exercise such power.

43 Even if Burns' Complaint to Deny Ballard's discharge succeeds, the result would be that the remaining indebtedness to Ferraro would fail to be discharged along with all of the other prepetition indebtedness of Ballard. See supra note 27.

44 As Professor Dickerson has aptly stated, "[i]t is unclear why courts would use the success of an ex-spouse to discharge a debt if the debtor can repay the debt without sacrificing any economically necessary lifestyle expenditures." A. Mechele Dickerson, Lifestyles of the Not-So-Rich or Famous: The Role of Choice and Sacrflce in Bankruptcy, 45 BUFF. L. REV. 629 (1997).

IV. PARTIAL DISCHARGE

A substantial split of authority exists on the question as to whether a debt that falls under § 523(a)(15) may be partially discharged. Some courts have concluded that the language of § 523(a)(15) and its reference to "such debt" permits a partial discharge. See Greenwalt v. Greenwalt (In re Greenwalt), 200 B.R. 909, 914 (Bankr. W.D. Wash. 1996) ("Section 523(a)(15) itself speaks to the dischargeability of `such debt,' suggesting that the court may review each liability separately."). Other courts have found an equitable basis to permit partial discharge in a § 523(a)(15) circumstance. Baker v. Baker (In re Baker), No. 99-10575-W, Adv. No. 00-80048-W, 2000 WL 1690314, at * 18 (Bankr. D.S.C. Oct. 13, 2000) ("[This court] is inclined to follow the more liberal view on the issue to conclude that partial discharge in cases dealing with § 523(a)(15) is an `equitable and pragmatic' practice which does not allow the debtor a windfall if he or she is unable to pay the total balance of the debt, yet has sufficient resources to partially meet the obligation.").⁴⁵ Other courts have disagreed, concluding that the language of the statute prevents a partial discharge. See, e.g., Smith v. Smith (In re Smith), 218 B.R. 254, 260 (Bankr. S.D. Ga. 1997) ("Because of the language of the statute, considerations of comity, and the fact that a party may still modify a support decree in State Court after a Section 523 determination, a partial discharge should not be permitted."); Fitzsimonds v. Haines (In re Haines), 210 B.R. 586, 594 (Bankr. S.D. Cal. 1997) ("[T]he concept of `partial discharge' does not belong in section 523(a)(15)."); Taylor v. Taylor (In re Taylor), 191 B.R. 760, 766 (Bankr. N.D. Ill.) ("The statute makes no provisions for determining that a part of a debt may be found dischargeable, but the remainder nondischargeable."), aff'd, 199 B.R. 37 (N.D. Ill. 1996); Collins v. Florez (In re Florez), 191 B.R. 112, 116 n. 6 (Bankr. N.D. Ill. 1995) ("This Court is not persuaded that an undue hardship analysis belongs within the bounds of Section 523(a)(15)."); Silvers v. Silvers (In re Silvers), 187 B.R. 648, 650 (Bankr. W.D. Mo. 1995). Finally, some courts have gone only as far as to hold that if a debtor has been found to be able to pay under § 523(a)(15)(A), a partial discharge is inappropriate. See Patterson v. Patterson (In re Patterson), No. 96-6374, 1997 WL 745501, at *3 (6th Cir. Nov. 24, 1997) (unpublished) ("Because the appellant [debtor] is able to pay the debt over a `reasonable' period of time, this case does not present facts warranting the consideration of the possibility of a partial discharge."); Brasslett v. Brasslett (In re Brasslett), 233 B.R. 177, 186 (Bankr. D. Me. 1999) ("Having concluded that Ronald [the debtor] has the ability to pay the entire debt, I decline to engage in a protracted, sliding-scale evaluation of the marginal shifts in benefit/detriment analysis that would accompany each additional dollar of discharge that might be had under the `partial dischargeability' approach.").

45 See generally Perkins v. Perkins (In re Perkins), 221 B.R. 186, 190 (Bankr. N.D. Ohio 1998) (adopting the practice of partial discharge as "equitable and pragmatic"); Melton v. Melton (In re Melton), 228 B.R. 641, 646 (Bankr. N.D. Ohio 1998) (citing Perkins and ordering a partial discharge); Gagne v. Gagne (In re Gagne), 244 B.R. 544, 548 (Bankr. D.N.H. 1998) (refusing to impede the debtor's fresh start by strict application of the "pernicious creature" of § 523(a)(15), and instead discharging one divorce-related debt, but not the other); Comisky v. Comisky (In re Comisky), 183 B.R. 883, 884 (Bankr. N.D. Cal. 1995) (finding § 523(a)(15) to be similar to § 523(a)(8) and its undue hardship analysis, the court concluded that a bankruptcy court could find a debt nondischargeable and still limit the enforcement of its judgment); Elisa A. Smith, Note, Partial Dischargeability of Property in a Divorce Settlement: A Call for an Equitable Remedy Under Section 523 (a) (15) of the Bankruptcy Code, 15 BANKR. DEV. J. 87, 118 (1998) (arguing in favor of a partial discharge because "[a]n all or nothing approach virtually wipes away the main presumption of the statute — that debts shall be nondischargeable").

Previously, this Court has permitted a partial discharge in one instance. In Craig v. Craig (In re Craig), 196 B.R. 305 (Bankr. E.D. Va. 1996), a former spouse sought to prevent the discharge of two obligations of the debtor arising from a separation agreement: (i) the debtor was awarded possession of the marital residence and agreed to take over the monthly payments on the two outstanding mortgages on the property and hold his spouse harmless, and (ii) the debtor and former spouse were to liquidate $1000.00 worth of United States Savings Bond and evenly divide the funds. Id. at 307. The debtor failed to complete either. Id. At trial, the debtor testified that his monthly expenses exceed his income. Id. at 310 n. 3. Convincing this Court he had insufficient income to pay the mortgages, the debtor failed in his proof that over time the $500.00 owed from the savings bonds liquidation could not be paid. Id at 310. Accordingly, this Court allowed the discharge of the mortgage debt and the hold harmless obligation while excepting the $500.00 savings bond obligation from discharge. Id. at 310-11.⁴⁶

46 In her argument, counsel for Ferraro suggested that a partial discharge was permissible in this district, relying upon the Craig decision. This Court agrees that the circumstances present in Craig of two disparate debts permits a discharge of one debt while denying the discharge of a second, much larger debt. Craig, of course, did not address the partial discharge of a single debt, such as the Remaining BART Debt in the instant case. Despite her acceptance of Craig, Ferraro does not appear to have altered her position that the entire Remaining BART Debt should not be discharged.

The partial discharge permitted in Craig apparently relies upon the statutory interpretation of § 523(a)(15) that the language of "such debt" requires an application of the twin tests of the statute to each of the obligations for which discharge is sought. This seems prudent when the obligations are of a dramatic difference in type and amount, as was the case in Craig. This Court is less confident of its authority to effect a partial discharge in an instance in which the contested obligation is a unitary one. Cf. Greenwalt, 200 B.R. at 914 (reasoning that the language "such debt" in § 523(a)(15) allowed courts to differentiate between different debts constituting the divorce . . . related obligations by discharging some and not others; notably the court did not rely on the language "such debt" to partially discharge one particular debt).

Reliance on the statutory language of "such debt" in the instant proceeding appears specious. of course, the plain language of the statute must control if it is clear and unambiguous. As the Supreme Court has stated:

There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning.

Perry v. Commerce Loan Co., 383 U.S. 392, 400 (1966) (quoting United States v. Am. Trucking Ass'ns, 310 U.S. 534, 543 (1940)). Nonetheless, the Bankruptcy Code is complex and often its legislative history may prove instructive. See, e.g., Kenan v. Fort Worth Pipe Co. (In re Rodman, Inc), 792 F.2d 125, 128 (10th Cir. 1986) ("While resort to legislative history is unnecessary and inappropriate when a statute is clear and unambiguous on its face, we are aware that the language used throughout the Bankruptcy Code is complex and specialized and therefore particular caution is required." (citation and footnote omitted)).

The plain language of § 523(a)(15) states "[a] discharge under section 727 does not discharge an individual debtor from any debt . . . not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation . . . unless . . . the debtor does not have the ability to pay such debt . . . or 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." 11 U.S.C. § 523 (a)(15) (2001). Having held that Ballard does have the ability to pay the Remaining BART Debt and that the discharge of such debt would not result in a benefit to Ballard greater than the detriment that would result to Ferraro, the plain language of the statute compels this Court to conclude that the Remaining BART Debt is not discharged. The Code says nothing about partially discharging the debt; rather, the language gives the Court a decision to make: either the debt is discharged or it is not. Cf. In re Smith, 218 B.R. at 260 ("Most courts hold that the language of the statute does not provide for a partial discharge and, therefore, discharge pursuant to § 523(a)(15) should follow an `all or nothing' approach."). Had Congress intended a middle ground, it could have drafted the language appropriately.⁴⁷ Congress, however, did not draft § 523(a)(15) in that manner, and this Court has no power to stretch the language of the Code beyond its plain meaning. Moreover, as noted earlier, see supra note 22, the legislative history is sparse and has nothing to add as to the ability of this Court to partially discharge a single § 523(a)(15) debt. Likewise, the Court is unaware of any basis to believe Congress intended to incorporate the concept of "undue hardship" into § 523(a)(15). See Bodily v. Morris (In re Morris), 193 B.R. 949, 953 (Bankr. S.D. Cal. 1996).

47 For example, "the debt is discharged to the extent such debt goes beyond the Debtor's ability to pay; to the extent the Debtor has the ability to pay, the Debt is nondischargeable in that amount as determined by the Court through application of the disposable income test over a period of 3-5 years."

The attraction of a partial discharge is evident in the instant case and understandable in other decisions applying a partial discharge. Nonetheless, the Court cannot do equity where is has no authority to do so. Section 105 of the Bankruptcy Code allows "[t]he court [to] issue any order . . . that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. § 105. Although this Court's equitable powers are broad, they may be exercised only "to carry out the provisions of" the Bankruptcy Code and may extend no further than the confines of the Bankruptcy Code allow. See Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988) ("[W]hatever equitable powers remain in the bankruptcy courts must and can only be exercised within the confines of the Bankruptcy Code."). In the instant case, the Bankruptcy Code plainly states that a § 523(a)(15) debt will not be discharged absent one of its two affirmative defenses. The language of§ 523(a)(15) requires a balancing test to reach a result, but does not allow for the result to be balanced — the debt is discharged or it is not.

Although this Court views the language of§ 523(a)(15) as clear on the issue of partial discharge, the Court recognizes that the overall scheme of § 523(a) is not the most artfully crafted. See, e.g., In re Butler, 186 B.R. 371, 373 (Bankr. D. Vt. 1995) ("The use of triple negatives in this subsection has turned an otherwise well intended statute into sausage.") Even if this Court were to find a basis to order a partial discharge, however, to do so would only open a pandora's box of problems. Many of the decisions applying a partial discharge on "equitable grounds" appear to somewhat arbitrarily apply an outside limit on the time period over which a debtor may make periodic payments on a domestic obligation. This outcome is often supported by an observation that to do otherwise is "harsh" and requires adoption of an "all or nothing" approach. Yet, other debts for which discharge is denied under § 523 of the Bankruptcy Code survive regardless of their magnitude. See, e.g., In re Haines, 210 B.R. at 593. This approach also strikes the Court as unsupported by the statutory language of§ 523(a)(15). While the similarity of the language of § 523(a)(15) and § 1325 support application of the disposable income standard utilized in Chapter 13 cases to determine whether the debtor has an ability to pay, imposition of a Chapter 13 temporal payment limitation of however many months or years does not appear to be sanctioned by this statute.

In Fitzsimonds v. Haines (In re Haines), 210 B.R. 586 (Bankr. S.D. Cal. 1997), Judge Adler aptly warned of the potential ill-effects in partially discharging martial property settlement debts:

When one analyzes what was actually done by the courts which have partially discharged divorce debt, it is clear that they are multiplying disposable income by a time period of 36 to 60 months (the permissible length of a Chapter 13 plan) and determining any amounts in excess of that to be discharged. . . .

. . . .

It is unnecessary for a court to invoke concepts relating to student loan hardship discharges once the court has determined ability to pay and balanced the equities in favor of the former spouse creditor. The claim that the "all or nothing" approach is "harsh" is overstated as this result is no different than any other determination that a debt is nondischargeable. This court joins with the courts in the [decisions in] In re Hill, In re Silvers, 187 B.R. 648, 649 (Bankr. W.D. Mo. 1995) and In re Florez, 191 B.R. 112, 115 (Bankr. N.D. Ill. 1995) holding that the concept of "partial discharge" does not belong in section 523 (a)(15).

Id. at 593-94 (footnotes omitted). Despite these forebodings, however, the circumstances of the instant proceeding make imposition of a partial discharge tantalizing. The size of the Remaining BART Debt is significant because of the expiration of the three-year window to measure the obligation by the equity in the Chesapeake Property.⁴⁸ Retirement of this obligation by Ballard based upon this Court's findings of ability to pay make take as long as nine to ten years. Consigning Ballard to this potential fate gives pause to the Court. Yet nothing in the statute appears to suggest to the Court any notion of what a "reasonable" period to require payments may be found to be. Why two to five years may be found a reasonable period to require periodic payments while nine years would be unreasonable is not clear to this Court. Providing a debtor such as Ballard with a lesser debt (and more consistent with his apparent interpretation of paragraph 11(D) of the Stipulation Agreement) may be supported by notions of sympathy or "fairness," yet no support for this differentiation is contained within the words of § 523(a)(15).⁴⁹

48 Although the evidence is insufficient for this Court to adjudicate the exact amount of the Remaining BART Debt, assuming the contention of Ferraro that the value of the Chesapeake Property is $450,000.00 and applying Ballard's testimony that the encumbrance on the Chesapeake Property is $340,000.00, then had the Remaining DART Debt been satisfied within the tree-year window provided by the Stipulation Agreement, Ballard's payment would have been $27,500.00. If the Remaining BART Debt is measured by the value of the Chesapeake Property, Ballard's obligation may be as much as $112,500.00.

49 Unfortunately, under normal circumstances the best response to the Court's concerns for fairness and equity could be found in a debtor's option to file Chapter 13 and negotiate a de facto "partial discharge." Cf. In re Haines, 210 B.R. at 594 (noting also that "[a]lthough well-intentioned, this court believes the courts which permit the partial discharge of divorce debts have overlooked the fact that there is already a remedy provided in the Bankruptcy Code for a debtor faced with a large non-dischargeable divorce debt — the provisions of Chapter 13. . . . [U]pon completion of the [Chapter 13] plan, the debtor will be discharged of any balance owed the former spouse creditor since a section 523(a)(15) obligation is not one for support" (citing 11 U.S.C. § 1328 (a)(2))). Ballard, however, appears to be ineligible for Chapter 13, see supra note 15, in yet another example of the unique set of facts this case presents. Chapter 11 would not solve Ballard's dilemma because it "does not discharge an individual debtor from any debt excepted from discharge under section 523 of this title." 11 U.S.C. § 1141 (d)(2). In the end, this case appears to pose a realistic example of what Johann Wolfgang von Goethe said long ago: "`The sum which two married people owe to one another defies calculation. It is an infinite debt, which can only be discharged through all eternity'" See Smith, supra note 45, at 117 (quoting JOHANN WOLFGANG VON GOETHE, ELECTIVE AFFINITIES, bk 1, chp. 9 (1808)).

Besides the plain language of the Bankruptcy Code, and the sparse legislative history of § 523(a)(15), concerns of federalism and comity lead this Court to conclude that a partial discharge under § 523(a)(15) would be inappropriate in the instant case. Determination of appropriate monthly payments of a domestic obligation is traditionally the province of state courts, which possess clearer statutory authority to order periodic payments and adjust payments over time to reflect changed financial circumstances. After order of a partial discharge of a domestic obligation by this Court, no future adjustment can ever be made to the reduced obligation. As Judge Adler has aptly observed:

There is no ability for the court to adjust a determination of partial dischargeability based on changes in the debtor's circumstances. If, for example, the current Mr. and Mrs. Haines were to divorce, or Mr. Haines were to retire or the Haines' semi-adult children were to leave home, there could be significant changes in Haines' ability to pay the debt owed Fitzsimonds. Were this court to partially discharge some of the debt owed Fitzsimonds after finding an ability to pay some but not all the debt, no further adjustment could be made in the context of this action. Most significantly, none of the partially discharged debt could ever be revived should Haines' circumstances improve.

In re Haines, 210 B.R. at 593-94. Judge Davis has succinctly described this court's reluctance to impose a partial discharge for reasons of comity:

Alimony and support are inherently the domain of the state and state court processes are entitled to great deference; thus a bankruptcy court should limit its role in domestic relations to the narrowest role possible under the statute. The Code requires a bankruptcy court to determine disehargeability; however, for this Court to grant partial discharge is not clearly authorized by the Code. Since it is not, and because such an exercisc duplicates much of the state court role in deciding if and how to modify a decree, I find it an impermissible intrusion for this court in the context of a dual state-federal judicial system.

Smith v. Smith (In re Smith), 218 B.R. 254, 260 n. 2 (Bankr. S.D. Ga. 1997).

Ultimately, the imposition of a shorter payment period for Ballard, which in turn reduces the total amount of the indebtedness, strikes the Court as in essence ordering a reformation of the Stipulation Agreement when no traditional grounds are in evidence to support such a remedy. Much as other courts previously have concluded, having found Ballard has the ability to pay under § 523(a)(15)(A), and specifically an ability to pay a substantial amount on a monthly basis, this Court under the totality of the circumstances here declines to order the partial discharge of any portion of the Remaining BART Debt.

V.

For the reasons expressed above, the Court finds that the Remaining BART Debt is not in the nature of support under § 523(a)(5), nor is it a debt incurred through willful and malicious injury as understood in § 523(a)(6). The Remaining BART Debt is nondischargeable, however, because the Court finds, pursuant to § 523(a)(15)(A), that Ballard has the ability to pay the Remaining BART Debt, and further finds the benefit to Ballard of discharging the Remaining BART Debt does not outweigh the detriment to Ferraro should this debt be discharged. The circumstances in evidence here do not support the order of a partial discharge of any portion of the Remaining BART Debt. Because the evidence is insufficient to establish the amount of the Remaining BART Debt under the provisions of paragraph 11(D) of the Stipulation Agreement, the parties are directed to return to the Circuit Court of the City of Norfolk, Virginia, or any other state court having jurisdiction over enforcement of the Stipulation Agreement, for a determination of the amount of the Remaining BART Debt.⁵⁰ Accordingly, the Remaining BART Debt, in an amount to be subsequently determined by the Virginia state court, is found to be nondischargeable.

IT IS SO ORDERED.

Mrs. Ballard Ballard Mortgage $ 818.00 $ $ 818.00 Utilities 300.00 300.00 Water Sewer 100.00 100.00 Telephone 140.00 140.00 Cable Security 67.00 67.00 Maintenance 200.00 100.00 300.00 Food 375.00 375.00 750.00 Clothing 300.00 50.00 350.00 Laundry Dry Cleaning 80.00 10.00 90.00 Medical 140.00 20.00 160.00 Transportation 120.00 150.00 270.00 Recreation 343.00 100.00 443.00 Charitable 50.00 20.00 70.00 Insurance: Home 4.00 4.00 Life 70.00 70.00 Health Auto 120.00 120.00 Other Taxes: Personal Property 20.00 16.66 36.66 Installment Payments Auto 178.00 178.00 Equity Loan 60.00 60.00 Credit Card 125.00 300.00 425.00 SunTrust Loan #9009[*] 550.00 550.00 Bank of Hampton Roads[**] 540.45 540.45 SunTrust Line of Credit 300.00 300.00 BART Assoc. (partner loan) 500.00 500.00 Alimony, child support 500.23 500.23 Payments for support of others: Carolyn — Education expense 50.00 50.00 Pierce — Education expense 50.00 50.00 Sarah — Student loan 200.00 200.00 Regular Expenses: Personal grooming 100.00 20.00 120.00 Barry Kantor (attorney)[***] 200.00 200.00 PLUS Loan 500.00 500.00 Gifts, Vacations 250.00 25.00 275.00 Tuition — Edward (Son of Mrs. Ballard) 300.00 300.00 Books — supplies TOTAL 4110.00 4767.34 8877.34 [*] SunTrust (formerly Crestar) Loan #9009 is a loan to Ballard, the repayment of which is guaranteed by Ballard's cousins who own Ballard Fish Oyster.
[**] This is a renewal and term out of the line of credit Bank of Hampton Roads extended to U.S. Building.
[***] Barry Kantor is the attorney who represented Ballard in certain state court proceedings initiated by Ferraro relating to the Stipulation Agreement.
The balances owed on the Ballards' various obligations are as follows:Mrs. Ballard Ballard Mortgage $100,000.00 Automobile Loan 2800.00 Home Equity Loan 10,000.00 Credit Cards 5900.00 826.27 Bank of Hampton Roads 21,814.93 SunTrust Bank Loan #9009 3273.39 SunTrust Line of Credit 11,619.61 BART Associates (partner loan) 9150.00[*] Sarah (student loan) 4000.00 Barry Kantor (attorney) 2000.00 PLUS Loan 20,000.00 [*] Ballard testified this balance is now $8650.00. The balances listed reflect compilations completed approximately six weeks prior to trial.
In addition to these amounts owed, Ballard owes $2000.00 to an attorney for defending various matters brought in state court by Ferraro concerning the Stipulation Agreement and approximately $20,000.00 to his bankruptcy counsel for legal services performed in connection with this case.