Tyeane Halbert v. James T. Dimas
Opinion
Devan Dennis and Tyeane Halbert (collectively, Debtors) each owed debts to the Illinois Department of Human Services (DHS). Dennis owed for overpayments made to her under the Illinois Child Care Assistance Program; Halbert owed for overpayments made to her under the Supplemental Nutrition Assistance Program. The Debtors each filed for bankruptcy. DHS now appeals from orders entered by *1017 the bankruptcy court in each case holding that the overpayment debts were not domestic support obligations. For the reasons that follow, we affirm the orders of the bankruptcy court.
I. BACKGROUND
A. Devan Dennis
Dennis applied for and received benefits under the Illinois Child Care Assistance Program to help pay her daughter's daycare tuition. In April 2009, DHS determined it had overpaid benefits to her daycare provider because Dennis failed to provide accurate information on her application about her employment. The total amount of the overpayment was $7,962.25.
In 2018, Dennis filed a Chapter 13 bankruptcy petition. DHS filed a proof of claim, arguing that the $7,962.25 overpayment debt was a priority domestic support obligation under § 507(a)(1)(B). Dennis objected, arguing the overpayment was a general unsecured dischargeable debt. The bankruptcy court agreed with Dennis, holding that her overpayment debt to DHS was not a domestic support obligation.
B. Tyeane Halbert
Halbert applied for and received Supplemental Nutrition Assistance Program benefits from DHS for herself and her two minor children. From October to December 2009, Halbert received payments totaling $1,008. From August 2010 through January 2011, she received payments totaling $2,386. DHS then determined that she had failed to disclose income which resulted in a $3,394 overpayment of benefits. Halbert paid $1,473 and in 2015 DHS intercepted the remaining balance of $1,921 from her income tax refund.
Halbert filed a Chapter 7 bankruptcy petition in 2016, and claimed the intercepted funds as an exempt asset. On July 21, 2016, she filed an adversary complaint to recover the intercepted payment as an "avoidable preference" under
II. ANALYSIS
We review a bankruptcy court's legal conclusions
de novo
.
In re Doctors Hosp. of Hyde Park, Inc.
,
For a debt to be a domestic support obligation it must be "in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) [to a] spouse, former spouse, or child of the debtor or such child's parent, without regard to whether such debt is expressly so designated."
DHS's position, however, would expand the definition of domestic support obligation far beyond what is intended by the bankruptcy code. "[A]s noted by one respected treatise 'virtually any incorrect payment by the government to a household is in most cases used to provide support to the household.' Is a debt owed to the government based on an incorrect tax refund, or a debt owed to a public housing authority on a judgment for rent, to be considered 'in the nature of support'?"
In re Halbert,
In re Vanhook
,
DHS's status is similar to the creditor in In re Vanhook . The Debtors do not owe DHS money for support payments; they owe DHS because they received money they were not statutorily entitled to. Because such a payment is not in the nature of alimony, maintenance, or support, we agree with the bankruptcy court decision that this is merely an overpayment of benefits and not a domestic support obligation.
III. CONCLUSION
The orders of the bankruptcy court are AFFIRMED.
Reference
- Full Case Name
- In RE: Devan DENNIS and Tyeane Halbert, Debtors-Appellees, Appeals Of: Illinois Department of Human Services and James T. Dimas.
- Cited By
- 5 cases
- Status
- Published