What Happens If My Ex Files For Bankruptcy?
I get lots of calls from people who have gotten a notice from the bankruptcy court about their ex-spouse’s bankruptcy. They want to know what the notice means and if they need to do anything. They are panicking, because they don’t understand what their ex’s filing means for them. Before I can give them an answer, I need more information. I need to know if their ex owes them child support or maintenance (also called alimony) or if they have any joint debts with their ex.
When someone files bankruptcy, they have to tell everyone they owe money to or owe money with. If they owe money “with” someone, it means that they are jointly legally responsible for a debt with that other person.
If there isn’t any joint debt, but the ex owes the person support or maintenance, usually there isn’t anything to do. Those obligations generally do not go away when someone files bankruptcy, so the ex will still have to keep paying those debts. However, if there is a dispute about whether or not the ex owes support or maintenance or that what the divorce decree calls support or maintenance is actually support or maintenance (as defined legally), then the person may need to hire a bankruptcy attorney to object to the ex’s bankruptcy.
If the caller and the ex have joint debts and the divorce decree requires the ex to pay the debts, things get more complicated.
Unfortunately, your divorce decree does not keep creditors from coming after you for a debt that your ex-spouse promised to pay. If you are liable with your ex-spouse on a debt, you should talk to an attorney for a thorough explanation of your rights and obligations, as soon as you find out your ex-spouse has filed a bankruptcy petition. Some of the provisions dealing with obligations from a dissolution of marriage proceeding are found in the Bankruptcy Code at 11 U.S.C. § 523(a)(5) and (15), be mindful of the corresponding deadlines for filing complaints relating to certain obligations arising from a dissolution of marriage. Click here to view Section 523.
What Happens If My Ex-Spouse Files Chapter 7 Bankruptcy?
If your ex filed for bankruptcy under Chapter 7, you might be in luck. While Chapter 7 bankruptcy will eliminate your ex’s debt to the original creditor or lender, Chapter 7 does not eliminate his obligation to you that was included in the divorce decree. So, for example, let’s say you have a joint credit card with your ex, and he files a Chapter 7 bankruptcy petition and that the divorce decree states that he is responsible for paying that credit card. Once he files his Chapter 7 petition, the credit card company has to stop trying to collect that debt from him, so there is a good chance they will start trying to collect that debt from you.
The divorce decree doesn’t offer you any legal protection from the credit card company. Now that your ex has filed Chapter 7 bankruptcy, they can come after you. However, since the divorce decree states that he is legally obligated to pay that debt, you can ask the divorce court to enforce the divorce decree by forcing him to pay you so that you can pay the credit card company. Of course, this will mean filing motions with the divorce court and going back to fight over this issue. That process can be time consuming and costly. You’ll have to decide whether or not it’s worth your time.
Because your ex has put you in this situation, you may need to consider bankruptcy as well.
What Happens If My Ex-Spouse Files Chapter 13 Bankruptcy?
If your ex filed for bankruptcy under Chapter 13, you might be in for trouble. While Chapter 13 bankruptcy will not eliminate support and maintenance obligations, it will eliminate obligations like having to pay joint debts. So, if your ex files a Chapter 13, you won’t be able to go back to divorce court to force him to pay you.
If you’re in this situation, you should know that there have been court decisions that have held that joint debt obligations have been held to be in the nature of a support or maintenance obligation, which means the ex-spouse who filed bankruptcy is still liable to the non-filing ex-spouse. But the outcome is not clear cut and is very fact specific. In other words, your mileage may vary.
If your ex filed a Chapter 13, it is absolutely worth your time to consult with an experienced bankruptcy attorney to see what your options are.
Talk To An Experienced Bankruptcy Attorney If Your Ex-Spouse Has Filed Bankruptcy
Your divorce decree may not keep creditors from coming after you for a debt that your ex-spouse promised to pay. If you are liable with your ex-spouse on a debt, you should talk to an attorney for a thorough explanation of your rights and obligations, as soon as you find out your ex-spouse has filed a bankruptcy petition. Some of the provisions dealing with obligations from a dissolution of marriage proceeding are found at 11 U.S.C. § 523(a)(5) and (15), be mindful of the corresponding deadlines for filing complaints relating to certain obligations arising from a dissolution of marriage. Click here to view Section 523.
If your ex has filed bankruptcy and his or her creditors have started chasing you, bankruptcy might be a good option. We offer free consultations to people who are considering bankruptcy. You can schedule your appointment with an experienced Denver, Colorado bankruptcy attorney by clicking here.