Is a former spouse's interest in a participant's erisa-qualified retirement plan a dischargeable debt during the participant's bankruptcy proceedings?
You may spend your time at school taking a full load of serious course work and yet never take a class in bankruptcy or in the law of ERISA (the Employee Retirement Income Security Act, the federal law that regulates most retirement plans). So the question above may make little or no sense to you.
But because you learned how to research case law from your excellent legal research teachers and those helpful librarians in your school's law library, you know how to find case law on just about any issue.
Suppose in your initial research you came across the discussion of the interaction between ERISA and bankruptcy found in In Re Nelson, 322 F.3d 541 (8th Cir. 2003), shown in the highlighted text in this graphic. "ERISA's anti-alienation provision"? "Whether the DRO qualified as a QDRO"? And what is an "alternate payee"? The written opinion in a case expresses the judge's reasoning on what is often a very narrow legal issue based upon the detailed facts of the case at hand. The judge is rarely going to include a basic overview and introduction to the area of law that the case deals with. While a case likeIn Re Nelson may be the ultimate goal of your research, it is probably NOT the best way to start learning about a new area of law such as the treatment of retirement plans during bankruptcy proceedings. |
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So unless you have taken some courses on ERISA and bankruptcy in school, the highlighted text from Nelsonmight as well be a secret code. And in a way it is a secret code: the jargon of law constitutes a language different from the everyday English we use to communicate with each other. Luckily, secondary resources can provide the key to unlock these secret codes.
One type of secondary resource to be discussed later in this lesson are treatises: books written by scholars and legal experts on a particular area of law. You can find treatises in any law library by searching its on-line catalog.
The Nelson case discusses this thing called a "QDRO" (pronounced "quad-drow") which seems to be an important concept when dealing with ERISA and bankruptcy. If you use that as a search term in an on-line library catalog, you might find the book shown here.
Aha! A "Handbook" about QDRO! And the title even says it's The Complete QDRO Handbook. Excellent! The Complete QDRO Handbook is a single-volume treatise. Early in the first chapter of this treatise, you'll find a brief summary of what a QDRO is, shown in the underlined part of the highlighted text shown here. |
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Yes! A QDRO is a "Qualified Domestic Relation Order" and they are state law orders that must be recognized by ERISA-qualified retirement plans. That makes sense, or at least it is starting to make sense. There's also a section in The Complete QDRO Handbook specifically about bankruptcy. This section discusses how QDROs are treated during bankruptcy proceedings. Just from the short excerpt highlighted in this example, you can gather that the question of whether a former spouse's interest in a retirement plan is a debt that can be discharged in bankruptcy depends on if the divorce property settlement - a type of Domestic Relations Order, or DRO - is a Qualified Domestic Relations Order, or QDRO. |
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This section of the book gives you a basic orientation to the legal concepts involved when bankruptcy, ERISA, and QDROs are at issue. ERISA is a significant federal law and there are numerous other treatises about ERISA and QDROs that could also help you while you are researching this issue. Treatises about bankruptcy might also include some discussion of ERISA and QDROs. |
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