After a divorce, what happens when one party files bankruptsy on the debt they received in the divorce but the other person’s name is still on the contract?

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After a divorce, what happens when one party files bankruptsy on the debt they received in the divorce but the other person’s name is still on the contract?

I have been divorced for over 2 years. My ex-husband is filing bankruptsy on the debt he got in the settlement (house/2nd/consumer debt). He would not refinance after the divorce and my name remains on the contracts. What can I do to protect myself?

Asked on May 22, 2012 under Bankruptcy Law, Washington

Answers:

Kenneth Berger / Kenneth A. Berger, Attorney at Law

Answered 9 years ago | Contributor

This gets complicated, so you may want a consultation with one of us bankruptcy attorneys. 

Assuming that your ex is filing a chapter 7 bankruptcy, Section 523 of the bankruptcy code defines which debts can and cannot get discharged. 

523(a)(15) is the section that applies to your situation, in that it excepts from discharge any debt "to a spouse ... in connection with a ... divorce decree..."  What this means in practical terms is that in a chapter 7, your ex may no longer owe the debt, but if you have to pay the debt, you may be able to pursue your ex for the money, or at least a judgment for the money.

If he filed a chapter 13 then the situation is different.  Good Luck.

As always, my comments are only applicable to Washington State and are not a substitute for getting competent, local, and more comprehensive, legal help.

 


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