I declared bankruptcy 3 years ago, and I am just now starting to get my finances in order. However, I just found out that my ex-wife will be declaring bankruptcy, and she has around $18,000 in credit card debt that she will be discharging.
After paying my bills and child support, I end up with $200 extra a month. There is no way I can pay the $18,000 credit card bills, and I can’t file bankruptcy for 3 – 4 more years. Can I stop the transfer of her $18,000 debt to my name (the credit cards have both our names from our marriage, and she assumed responsibility in the divorce papers).
–D
Jonathan Ginsberg responds: Your email raises several issues and the answer to your question is “it depends.”
My first question would be to ask why the joint credit card debts were not listed in your petition. The bankruptcy law requires that you list every debt in your name and all of these credit card debts should have appeared on your credit reports.
Realize that the credit card companies are not subject to your divorce agreement so nothing in that agreement binds them. Since she assumed responsibility anyway, it does not make sense that you did not list them. I cannot believe that any capable attorney would have told you not to list these debts.
In any case, one tactic here would be to move to reopen your bankruptcy case to add these debts. Realize, however, that reopening a case is discretionary by the judge. Also, there is case law which says that an unlisted debt can be discharged even if the creditor had notice when the case did not generate any assets to be sold and distributed to creditors. My thought is that you should try to reopen and hope for the best.
Secondly, the newest amendments to the Bankruptcy Code provide less protection for debtors attempting to discharge debts arising from a divorce. You may have an argument to object to her discharge or the discharge of these debts.
In a private email, I will send you the name of a friend and colleague who handles divorce related issues in bankruptcy cases.
Finally, you may want to speak with your divorce lawyer and/or my bankruptcy/divorce colleague to see if you have any argument for contempt of the Divorce Decree in Superior Court. Your ex-spouse is violating both the letter and the spirit of the divorce agreement and the trend in the law is moving away from allowing debtors to use bankruptcy to rid themselves of divorce related debt.