Win for the ex-wive's club: Nebraska Supreme Court (J. Stephan)allows alimony modification in divorce decree from $1/year to $950/month when Husband's bankruptcy discharged large debt for his closed Veterinarian's practice, and shifted the debt to the wife who was the loan guarantor; Smart move for wife to lock in a nominal alimony that she could later modify Collett v. Collett, 270 Neb. 722 December 9, 2005. No. S-04-850. (ex Husband) appeals from an order of the Box Butte County district court which modified the alimony award included in a decree dissolving his marriage to (exwife). The Court increased the alimony which Husb. was required to pay Wife from $1 per year to $950 per month for 123 months and required Shan to maintain insurance on his life, with Kimberly as the named beneficiary, until the alimony is paid in full. Supreme Court affirms. While Husb's bankruptcy was pending at the time of the divorce, Supreme Court still agrees that Wife's responsibility for the debt was not a circumstance the parties contemplated at the time of the decree

"Because alimony, albeit nominal, was allowed in the original decree, the award is subject to modification for "good cause shown" pursuant to § 42-365. In this context, "good cause" means a material and substantive change in circumstances and depends upon the circumstances of each case. Bowers v. Lens, 264 Neb. 465, 648 N.W.2d 294 (2002);..."Although it is clear that the parties contemplated Husb's bankruptcy and the discharge of his personal indebtedness to the bank, it is likewise apparent that the parties expected that the unpaid balance of the loan would be satisfied by the bank's foreclosure and sale of the collateral. Thus, the record supports the district court's finding that the 2003 deficiency judgment against Wife was not within the contemplation of the parties at the time of trial in 2001"

Husb mainly argued that the Court should not increase his alimony when it effectively repackages his discharged debts as alimony, in violation of the Chapter 7 discharge, anti-injunction provision 11 U.S.C. § 524(a)(2) (2000). 11 U.S.C. § 523(a)(15) generally prohibits a debtor from discharging debts that are in the nature of support debts. But since Wife did not ask the Bankruptcy Court to rule the vet practice loan was a support debt, she cannot end run this process with an alimony modification. The Nebraska Supreme Court rejected Husb's argument, because the court ordered him to pay alimony in the initial decree, however nominal. A substantial change in the debt burdens of the parties that result from a bankruptcy may be a "change of circumstances" to justify an alimony modification. Supreme court holding: Wife's shouldering the guarantor debt for the failed practice along with her loss of income justify modification of the alimony The record establishes thaWife's's liability for the deficiency judgment has resulted in a material and substantial change in the relative economic circumstances of the parties which was not within the reasonable contemplation of the parties at the time of the decree of dissolution. Satisfaction of the deficiency judgment over a 10-year period in her current circumstances would alter Wife's monthly cashflow from slightly positive to decidedly negative. Because the modification of the alimony award was specifically attributed to this proven change in circumstances, it is not contrary to or preempted by federal bankruptcy law. See, In re Siragusa, 27 F.3d 406 (9th Cir. 1994); Smith v. Smith, 741 So. 2d 420 (Ala. Civ. App. 1999).