Can my husband be held responsible for a joint debt he had with his ex-wife after she filed bankruptcy? 16 Answers as of February 25, 2015

He had a joint credit card when they were married. They divorced in 2006, and at that time the divorce decree stated they would each pay half of the debt. Over the following three years they both made payments to the account. In late 2009, my husband paid his half of the remaining debt, satisfying his share of the debt. Sometime after that the ex-wife filed bankruptcy, discharging the debt. In 2014 a credit bureau agency started to try to collect the amount discharged from my husband. Is this legal? Can the credit bureau try to collect on a debt that was discharged in bankruptcy? This is on my husband's credit report and we are trying to buy a house. It must be resolved before escrow closes.Thank you for your advice.

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Ronald K. Nims LLC | Ronald K. Nims
When you sign for a joint account, both parties are liable for the full amount of the debt to the lender. A divorce decree ordering each former spouse to pay 1/2 the debt, doesn't change either's liability to the lender; it just allows a spouse that pays more than half the right to charge the deadbeat spouse with contempt of court in the domestic case (and get reimbursed). The former wife's bankruptcy discharge eliminates her liability to the lender, making the former husband responsible for the whole amount. There is an issue whether the discharge eliminates the former wife's responsibility to reimburse her former husband for any payments over 1/2 that he has to make to the lender. If the divorce decree states that the former wife's obligation is "support" then she's still liable to him and he can still go to domestic court to enforce his rights. But if the divorce decree treats the former wife's obligation to him as part of the property settlement, her obligation is eliminated and he's stuck. That complex enough for you? So you need to interpret the divorce decree in light of the bankruptcy law, if we're talking about significant money; he needs to consult a bankruptcy attorney.
Answer Applies to: Ohio
Replied: 2/25/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
Creditors are not obligated to look to the terms of anyone's divorce paperwork to determine their legal rights. A creditor can look to either party for payment of a joint debt, and if one party is no longer responsible for the debt due to bankruptcy, the other party becomes responsible. Technically, the debt might be collectible through the divorce decree from the ex as a reimbursement, but if the wrong choice is made in trying to collect, you could be charged with violating the bankruptcy discharge.
Answer Applies to: Nevada
Replied: 2/24/2015
EDWARD P RUSSELL | EDWARD P RUSSELL
Only the debts of the person filing the bankruptcy are discharged so that his ex-wife' discharge would not affect him. This does sound like a domestic relations court order so that that debt should not be dischargeable. He should write his wife and her attorney and tell them that that debt is not dischargeable. It may too late to force his ex-wife's cooperation if the case is closed as he probably should have brought an action in the bankruptcy court maintaining that this domestic relations court ordered debt was not dischargeable.
Answer Applies to: Minnesota
Replied: 2/24/2015
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
The short answer is "yes." Only the ex-wife filed bankruptcy so your husband is responsible for the balance due on any community property debt. His liability was not discharged. He might be able to go after reimbursement from his ex if that right was spelled out in the marital settlement agreement or judgment.
Answer Applies to: California
Replied: 2/24/2015
The Law Offices of Ryan F. Beach, PLLC
The Law Offices of Ryan F. Beach, PLLC | Ryan Beach
If there is a joint debt and only one liable party files bankruptcy, only the filing party's liability on the joint debt is discharged (be mindful that some debts are or can be deemed nondischargeable). In other words, the non-filing party will be liable for the entire joint debt after the filing party receives a bankruptcy discharge. Your husband may have some recourse under the applicable judgment of divorce. He should consult with an attorney to see what rights he may have in pursuing his ex-spouse. Since the ex-spouse received a bankruptcy discharge, any attempt to collect from her should be done with extreme caution as it could be violation of the discharge injunction.
Answer Applies to: Michigan
Replied: 2/24/2015
    Idaho Bankruptcy Law | Paul Ross
    When parties divorce, it does not change the contract. Both husband and wife were liable on the debt. The creditor does not care if the parties divorced and can go after one or both of the parties on the debt. The bankruptcy discharge for the ex-spouse removed the option for the creditor to go after the ex-spouse so the only option is now your husband. This happens all the time. Depending on the bankruptcy, you may be able to hold the ex-wife in contempt for failure to pay the debts under the divorce decree. Visit with an attorney to make sure. But the debt must either be paid or discharged in order to not have it report on his credit.
    Answer Applies to: Idaho
    Replied: 2/24/2015
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    Yes, it is legal. Both parties are jointly liable on the debt. Your husband may want to contact his divorce lawyer to discuss options through the divorce court. Good luck!
    Answer Applies to: Colorado
    Replied: 2/24/2015
    Law Office of Marlin Branstetter
    Law Office of Marlin Branstetter | Marlin Branstetter
    In most cases agreements between spouses regarding payment of debts in a divorce are only binding on the spouses. The credit card company never agreed that each party would pay 50% of the debt. Si the company may attempt to collect from your husband for the remaining balance. The discharges the debt for the person who filed, not anyone else.
    Answer Applies to: California
    Replied: 2/24/2015
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    The creditor can come after him. He was a co-debtor on the account. As between co-debtors the creditor could care less who in fact makes the payment. It can collect from either one. The only person protected by the bankruptcy is the ex-wife. Stinks but that is how it is.
    Answer Applies to: California
    Replied: 2/24/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    Based only on the facts you presented, it appears likely that your husband is still liable for the debt unless he can assert a defense such as a statute of limitations. That depends on applicable state law, and only an attorney with all the relevant facts of his case can give him reliable legal advice.
    Answer Applies to: Oregon
    Replied: 2/24/2015
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    The credit card company was not privy to the divorce decree. As such both spouses had the duty to pay the debt in full. If the ex-wife filed chapter 7 bankruptcy then the husband may file a motion for order show cause in family court asking for damages against the ex-wife equal to the amount that the creditor was attempting to collect from him. This is because obligations owed to ex spouses arising out of the divorce decree are nondischargeable in a chapter 7. If the ex-wife filed a Chapter 13 then there is nothing the husband can do other than file his own bankruptcy.
    Answer Applies to: Nevada
    Replied: 2/24/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    First, I strongly suggest you retain an experienced lawyer to assist through this transaction. That said, if your husband was not part of the bankruptcy with his ex, and if he was liable on the debt because of the divorce judgment, then a creditor could conceivably try to collect from him. Remember that the divorce court has jurisdiction only over the divorcing couple NOT over the creditors. However, a debt assigned in a divorce to a person who later files bankruptcy is NOT discharged if it is for domestic support, as most of them are. But there are fine distinctions to be made between debts. Also, the ex has a somewhat broader discharge if she filed Chapter 13 than if she filed Chapter 7. It is the general view among bankruptcy lawyers that if a debtor files under Ch. 13, their obligation to pay the spouses debts (or to make property division payments to the ex-spouse), then the debt assigned by the divorce court to that spouse is discharged. (It is not discharged in a Ch. 7.) I personally believe that the general view is mistaken, and a good argument can be made that such debts are not discharged in Ch. 13 either. But to argue that point takes a lot of lawyer time which also means lots of legal fees and the outcome is far from certain. I hope this helps. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 2/24/2015
    Stephens Gourley & Bywater | David A. Stephens
    If the debt was a joint debt the discharge of one joint debtor does not necessarily discharge the other joint debtor. You may be able to resolve it in family court claiming that she cannot discharge her liability to your spouse for half of the debt.
    Answer Applies to: Nevada
    Replied: 2/24/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    They were "joint and severally liable" for the credit card debt. Just because a divorce decree says they should pay half, the credit cards are not bound by your divorce decree. He has two options, either file his own bankruptcy or sue his ex wife.
    Answer Applies to: New York
    Replied: 2/24/2015
    J.M. Cook, P.A. | J.M. Cook
    First, the debt is a joint debt. Therefore, the creditor can look to either party for collection of it. Second, the divorce settlement/agreement is a contract between the two parties - I doubt the credit card company was a party to the agreement. Therefore, the creditor is not bound by the agreement for each to pay half. Third, if the ex-spouse filed Chapter 13, her agreement to pay half was also discharged so husband can't seek recovery from ex-wife for amount he has to pay. If ex-spouse filed Chapter 7, then husband could sue ex-spouse for money he has to pay that she was obligated to pay under contract. Finally, if the credit agreement is some 8 years old without activity, then husband may have a statute of limitations defense to collection and grounds to sue the creditor for the attempted collection.
    Answer Applies to: North Carolina
    Replied: 2/24/2015
    John W. Lee, PC
    John W. Lee, PC | Kim A. Lewis
    Yes they can hold him responsible. Once he pays it he can then take his ex wife back to court on a show cause for her failure to comply with the divorce decree.
    Answer Applies to: Virginia
    Replied: 2/24/2015
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