What to do about a joint debt if my ex-wife filed for bankruptcy?

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What to do about a joint debt if my ex-wife filed for bankruptcy?

In my divorce paperwork my spouse was awarded our car. It was stated that she would be financially responsible for it. She has gone bankrupt and still owes $10,000. I just did a credit check on myself and saw that that the debt is on my credit report. Both of our names are listed on the paperwork when we bought the car. Should I pay this debt? Will it have a negative effect on me getting securing a mortgage?

Asked on January 22, 2012 under Bankruptcy Law, Pennsylvania

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your spouse is in contempt of the order. So for that, you need to inform the court and see if the decree can be amended. Pull up your credit reports (all of them) and dispute the debt in the interim by showing the court ordered her financially responsible. You may lose this dispute because essentially the lender loaned the money when you were both married and considers it a joint debt. Best case: the debt will be discharged but the car will be repossessed and it will still show up on your report unless you dispute it. Worst case: you pay off the loan and have the court amend the order to award you the vehicle and have the bankruptcy court take the loan out of the bankruptcy claim.


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