If you are thinking about bankruptcy and have been through a divorce, one of the things we are going to ask you for is a copy of the divorce decree or separation agreement. We need to see if you have agreed to pay off any of your ex-spouse’s debts and whether you have to pay child support or alimony.
If you have been researching bankruptcy, you know that certain debts are not dischargeable. Depending on whether you file Chapter 7 or Chapter 13, you may not be able to eliminate any debts of your ex-spouse that you promised to pay.
Chapter 7 does not allow you to eliminate debts of your ex-spouse that you promised to pay. Section 523(a)(15) of the Bankruptcy Code specifically excludes from discharge debts that are “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, or a determination made in accordance with State or territorial law by a governmental unit.”
However, Chapter 13 bankruptcy will allow you to discharge such debts.
It’s important to note what’s involved in a instance like this, though. If you promise to pay one of your ex-spouse’s debts, there are two creditors involved: whoever the original debt is owed to (such as a credit card company) and your ex-spouse. In either Chapter 7 or Chapter 13, the debt to original creditor will be discharged. As discussed above, depending on which chapter you choose, you may still be obligated to your ex-spouse. If you fail to fulfill the obligations of your separation agreement, you can expect to get into hot water with the judge in that case and find yourself in contempt.
If you have gone through a divorce and are considering bankruptcy, talk with a Colorado bankruptcy attorney to see what your obligations are.
