Even when the contentions against a debtor-spouse sound in fraud, breach of fiduciary duty, or intentional tort, the claims of the debtor's spouse survive a Chapter 7 discharge. Without the necessity of a timely adversary proceeding So held the 9th Cir. BAP in Cohen Building on the unpublished Adam BAP case, the BAP found that claims that were or could be raised in a marital dissolution case were not subject to the timeline in 523(c). Thus the non filing spouse could pursue her claims against the debtor in family court while the bankrutpcy case proceeded. The stew of facts in Cohen Let's orient ourselves in the facts of Cohen. The marital dissolution proceeding was pending when Mr. Cohen filed Chapter 7. Mrs. Cohen asserted that the debtor had breached his fiduciary duty to her; concealed assets; hidden asset transfers; and improperly used community assets after the dissolution was filed. She let the time for filing (a)2, 4 or 6 adversaries pass without … [Continue reading...]