  United States Bankruptcy Appellate Panel
                    FOR THE EIGHTH CIRCUIT

                           ____________

                           No. 97-6098NE
                           ____________

In re:                               *
                                 *
Michael Moeder                       *
                                 *
    Debtor.                      *
                                 *
Martha Moeder                    *
                                 * Appeal from the United
States
     Plaintiff-Appellee,                   *   Bankruptcy Court
for the
                               * District of Nebraska
     -v.-                        *
                               *
Michael Moeder                   *
                               *
     Defendant-Appellant.        *
                               *
                         ____________

                       Submitted: March 13, 1998

                              Filed:       April 28, 1998
                           ____________

Before KOGER, Chief Judge, SCOTT, and DREHER, Bankruptcy
Judges.
                        ____________

DREHER, Bankruptcy Judge.

     This appeal allows us to revisit the issue of the
dischargeability of marital obligations under § 523 of the
Bankruptcy Code. The bankruptcy court in this case held that
certain debts owed to the debtor's former spouse are
nondischargeable under 11 U.S.C. § 523(a)(5) and (a)(15).
After carefully considering the arguments of the parties and
the record on appeal, we affirm in part and reverse in part.




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                        I.   BACKGROUND

     Michael ("Michael") and Martha ("Martha") Moeder were
married on November 20, 1982.     During their marriage, the
parties adopted Nicole Michelle Moeder, a minor child born on
September 13, 1990. Eventually Michael and Martha separated,
and, on March 22, 1996, they were divorced by decree entered
in Nebraska state court.     Under the terms of the divorce
decree, Martha was awarded sole custody of Nicole and Michael
was ordered to pay child support in the sum of $265 per month
until Nicole reached the age of majority, died or became
emancipated. In addition, the state court ordered Michael to:
(1) pay alimony in the amount of $100 per month for a term of
forty-eight months; (2) provide health insurance for Nicole;
(3) pay 78% of all unreimbursed medical expenses incurred on
Nicole's behalf; (4) pay a $985 outstanding debt to Nicole's
child psychologist; and (5) pay to Martha the sum of $10,392
plus interest, representing Martha's share of the marital
property awarded to Michael under the decree.

     On September 24, 1996, Michael filed a petition for relief
under Chapter 7 of the United States Bankruptcy Code.        On
October 24, 1996, Martha commenced the present adversary
proceeding, seeking a determination that certain of Michael's
obligations under the divorce decree are nondischargeable
pursuant to 11 U.S.C. § 523(a)(5) and (a)(15).            After
conducting a trial on the issue, the bankruptcy court ruled
that Michael's obligation to pay alimony, his obligation to pay
Nicole's medical expenses, and his obligation to pay the child
psychologist constituted nondischargeable "alimony, maintenance
or support" under § 523(a)(5). The bankruptcy court further
ruled that Michael's $10,392 property settlement obligation
constituted a nondischargeable property settlement pursuant to
§ 523(a)(15). In making its decision under § 523(a)(15), the
bankruptcy court found that Michael did not have the ability
to pay his debt to Martha from his disposable income, but

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nevertheless concluded that the debt was nondischargeable
because the benefit to Michael of discharging the debt was
outweighed by the detrimental effect that nonpayment of the
debt would have on Martha. Michael appeals.1




1
        In addition to his appellate brief, Michael has submitted for consideration by the Court a
Reply Brief and an Affidavit of John D. Rouse, to which Martha has objected. In light of
Michael's pro se status, we believe that a certain degree of flexibility is warranted, and we
therefore deny Martha's motion to strike Michael's Reply Brief. As for Michael's submission of
the Rouse Affidavit, however, it is quite clear that the time for submitting evidence in this case has
passed and we deny Michael's request to submit additional evidence on appeal. Finally, as for
Michael's objection to the admissibility of exhibit #16 (a letter from Dr. Konar), Michael failed to
make this objection at trial and any objection he may have had has been waived.

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                       II.   DISCUSSION

     Section 523(a) of the Bankruptcy Code excepts certain
categories of debts from a debtor's discharge granted under
section 727, 1141, 1228(a), 1228(b) or 1328(b).     Among the
debts rendered nondischargeable by this provision are marital
obligations owed to a spouse, former spouse, or child of the
debtor incurred by the debtor in the course of a divorce or
separation. Specifically, § 523(a)(5) of the Code excepts from
discharge any debt:

    to a spouse, former spouse, or child of the debtor,
    for alimony to, maintenance for, or support of such
    spouse or child, in connection with a separation
    agreement, divorce decree or other order of a court
    of record, determination made in accordance with
    State or territorial law by a governmental unit, or
    property settlement agreement, but not to the extent
    that --
              (A) such debt is assigned to another entity,
         voluntarily, by operation of law, or otherwise
         (other than debts assigned pursuant to section
         408(a)(3) of the Social Security Act, or any
         such debt which has been assigned to the Federal
         Government or to a State or any political
         subdivision of such State); or
              (B)   such   debt   includes   a   liability
         designated as alimony, maintenance, or support,
         unless such liability is actually in the nature
         of alimony, maintenance or support.

11 U.S.C. § 523(a)(5) (1994). Thus, under § 523(a)(5), a debt
that is "actually in the nature of alimony, maintenance or
support" of a spouse, former spouse, or child of the debtor"
is nondischargeable in bankruptcy.

     In 1994, Congress expanded the exception to discharge for
marital obligations by adding § 523(a)(15) to the Bankruptcy
Code. Section 523(a)(15) renders nondischargeable any debt:



                               5
    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 dependant of the debtor and, if the debtor is
         engaged in 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.

Id. § 523(a)(15). Section 523(a)(15) excepts from discharge
those debts arising out of marital dissolution proceedings that
do not constitute nondischargeable alimony, maintenance or
support under § 523(a)(5); i.e. property settlement awards.
The legislative history of this provision indicates that it was
added to the Bankruptcy Code to provide greater protection for
nondebtor divorcing spouses who agree to take reduced alimony
and support payments in exchange for an increased property
settlement. H.R. REP. NO. 103-385, at 54 (1994), reprinted in
1994 U.S.C.C.A.N. 3340, 3363.        Thus, while a debtor's
obligation to make a settlement of marital property would be
dischargeable under § 523(a)(5), such an obligation is
nondischargeable under § 523(a)(15), with two important
exceptions: (1) subsection (A) of § 523(a)(15) provides that
a property settlement award arising out of divorce proceedings
is dischargeable where the debtor does not have the ability to
pay the debt from disposable income; and (2) subsection (B)
provides that such a property settlement award is dischargeable
where discharging such debt would result in a benefit to the
debtor that outweighs the detrimental consequences to the

                               6
nondebtor spouse. See Jodoin v. Samayoa (In re Jodoin), 209
B.R. 132, 139 (B.A.P. 9th Cir. 1997); Schaefer v. Deppe (In re
Deppe), 217 B.R. 253, 259 (Bankr. D. Minn. 1998); Johnson v.
Rappleye (In re Rappleye), 210 B.R. 336, 340 (Bankr. W.D. Mo.
1997); Williams v. Williams (In re Williams), 210 B.R. 344, 346
(Bankr. D. Neb. 1997); Wellner v. Clark (In re Clark), 207 B.R.
651, 655-56 (Bankr. E.D. Mo. 1997).




                               7
     As we have previously stated, the question of whether a
particular debt constitutes "alimony, maintenance or support"
or rather constitutes a property settlement is a question of
federal bankruptcy law, not of state law. Tatge v. Tatge (In
re Tatge), 212 B.R. 604, 608 (B.A.P. 8th Cir. 1997) (citing
Williams v. Williams (In re Williams), 703 F.2d 1055, 1056 (8th
Cir. 1983) (quoting H.R. REP. NO. 95-595, at 364 (1977))). The
crucial issue in making this determination is the intent of the
parties and the function the award was intended to serve at the
time of the divorce. Holliday v. Kline (In re Kline), 65 F.3d
749, 751 (8th Cir. 1995); Adams v. Zentz, 963 F.2d 197, 200
(8th Cir. 1992); Williams, 703 F.2d at 1056; Boyle v. Donovan,
724 F.2d 681, 683 (8th Cir. 1984). Factors to be considered
by the courts in determining whether an award arising out of
marital dissolution proceedings was intended to serve as an
award for alimony, maintenance or support, or whether it was
intended to serve as a property settlement include, but are not
limited to: the relative financial conditions of the parties
at the time of the divorce; the respective employment histories
and prospects for financial support; the fact that one party
or another receives the marital property; the periodic nature
of the payments; and whether it would be difficult for the
former spouse and children to subsist without the payments.
Tatge, 212 B.R. at 608; Kubik v. Kubik (In re Kubik), 215 B.R.
595, 599 (Bankr. D.N.D. 1997).         The bankruptcy court's
determination of this issue constitutes a finding of fact that
may be reversed only if it is clearly erroneous under the
evidence presented. First Nat'l Bank v. Pontow, 111 F.3d 604,
609 (8th Cir. 1997); Kline, 65 F.3d at 750; Adams, 963 F.2d at
200; Williams, 703 F.2d at 1056.

     Applying these principles to the first part of the
bankruptcy court's holding, we have no trouble affirming the
bankruptcy court's determination that Michael's obligations to
pay alimony, medical expenses and the psychologist's bill are
nondischargeable under § 523(a)(5).      The record before us

                               8
indicates that, in ordering Michael to pay these debts, the
divorce court was concerned with balancing the income and
earning capacities of the parties and with providing for the
proper care and support of Nicole. Thus, we hold that the
bankruptcy court's finding that these debts were intended to
serve the function of "alimony, maintenance or support" was not
clearly erroneous.




                               9
     We reach a different conclusion with respect to the
bankruptcy court's holding that Michael's obligation to pay
Martha $10,392 plus interest is nondischargeable under §
523(a)(15), however. Although the court's finding that this
debt was intended to serve the function of a property
settlement rather than an award of alimony, maintenance or
support is supported by the evidence, we believe that the
bankruptcy court incorrectly applied the law in this case in
two respects. First, the bankruptcy court found the property
settlement debt in this case nondischargeable despite its
specific finding that "the debtor does not have the ability to
pay his obligations to his former spouse from income or
property which is not reasonably necessary to be expended for
his maintenance or support, and the support of his child,
through child support payments."       As discussed above, a
property settlement award that otherwise qualifies for
nondischargeability under § 523(a)(15) will be nevertheless
dischargeable in bankruptcy if either of the two exceptions
contained in subsections (A) and (B) apply. The bankruptcy
court's finding, if upheld, would indicate that subsection (A)
of § 523(a)(15) has been satisfied in this case and that the
property settlement debt should therefore be dischargeable by
the debtor.

     Second, we think that the bankruptcy court improperly
allocated the burden of proof in this case. In making its
finding that Michael did not have the ability to pay under §
523(a)(15)(A), the bankruptcy court indicated that the evidence
on Michael's ability to pay his debts was incomplete; that
Michael's testimony was not credible; that Michael failed to
recall specific information; that he was evasive and
argumentative; and that he did not respond directly to
questions asked of him. Despite this apparent failure of proof
on the debtor's part, the bankruptcy court held that the burden
fell on the objecting creditor to prove the inapplicability of
an exception to nondischargeability under § 523(a)(15)(A), and

                              10
concluded that the debtor did not have the ability to pay
because Martha had failed to prove otherwise.          Although
"several courts have grappled with the issue of burden proof"
in § 523(a)(15) cases, see Crossett v. Windom (In re Windom),
207 B.R. 1017, 1020-21 (Bankr. W.D. Tenn. 1997), we think that
the burden of proof lies with the debtor to show that an
exception to nondischargeability under § 523(a)(15)(A) or (B)
applies in a given case. It is true that in general the burden
falls on the objecting creditor to prove an exception to
discharge under § 523; nevertheless the majority of courts have
ruled that, once the objecting




                              11
creditor proves that the debt constitutes a property settlement
award incurred in the course of divorce proceedings, the burden
shifts to the debtor to prove either of the exceptions to
nondischargeability contained in subsections (A) or (B). See
Jodoin, 209 B.R. at 139; Rappleye, 210 B.R. at 340; Williams,
210 B.R. at 346; Clark, 207 B.R. at 655-56; Scigo v. Scigo (In
re Scigo), 208 B.R. 470, 473 (Bankr. D. Neb. 1997); Wynn v.
Wynn (In re Wynn), 205 B.R. 97, 101 (Bankr. N.D. Ohio 1997);
Schmitt v. Eubanks (In re Schmitt), 197 B.R. 312, 316 (Bankr.
W.D. Ark. 1996); Johnston v. Henson (In re Henson), 197 B.R.
299, 302-03 (Bankr. W.D. Ark. 1996); Bodily v. Morris (In re
Morris), 193 B.R. 949, 952 (Bankr. S.D. Cal. 1996). See also
Kirchner v. Kirchner (In re Kirchner), 206 B.R. 965, 970
(Bankr. W.D. Mo. 1997); Florio v. Florio (In re Florio), 187
B.R. 654, 657 (Bankr. W.D. Mo. 1995); Silvers v. Silvers (In
re Silvers), 187 B.R. 648, 649 (Bankr. W.D. Mo. 1995) (holding
that the debtor bears the burden of going forward with respect
to § 523(a)(15)(A) and (B), but not the burden of proof). But
see Marquis v. Marquis (In re Marquis), 203 B.R. 844, 847
(Bankr. D. Me. 1997); Greenwalt v. Greenwalt (In re Greenwalt),
200 B.R. 909 (Bankr. W.D. Wash. 1996); Willey v. Willey (In re
Willey), 198 B.R. 1007 (Bankr. S.D. Fla. 1996); Dressler v.
Dressler (In re Dressler), 194 B.R. 290, 302-03 (Bankr. D.R.I.
1996); Kessler v. Butler (In re Butler), 186 B.R. 371, 373-74
(Bankr. D. Vt. 1995) (holding that the objecting creditor has
the    burden    of   proving     that   the    exceptions   to
nondischargeability contained in § 523(a)(15)(A) and (B) do not
apply). We believe that the statutory language of § 523(a)(15)
indicates that the exceptions contained in subsections (A) and
(B) constitute affirmative defenses to nondischargeability
which    must   be   proven    by    the   debtor   to   escape
nondischargeability of the disputed debt. Therefore, although
the bankruptcy court found that the debtor did not have the
ability to pay his debts from disposable income under §
523(a)(15)(A), we conclude that the bankruptcy court improperly
placed the burden of satisfying this test on the objecting

                              12
creditor, rather than on the debtor. Accordingly, we believe
that the bankruptcy court's decision under § 523(a)(15) must
be reversed and remanded to the bankruptcy court for new
findings of fact while placing the burden on the debtor to
prove either of the exceptions to nondischargeability contained
in § 523(a)(15)(A) or (B).




                              13
                       III.   CONCLUSION

     We conclude that the bankruptcy court's decision under §
523(a)(5) should be affirmed, but that the bankruptcy court's
decision under § 523(a)(15) incorrectly applied the law and
improperly allocated the burden of proof. Accordingly, the
bankruptcy court's decision is AFFIRMED IN PART, REVERSED IN
PART, and REMANDED for further proceedings consistent with this
opinion.

A true copy.

    Attest:

         CLERK, U.S. BANKRUPTCY APPELLATE PANEL
         FOR THE EIGHTH CIRCUIT




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