Dear Bankruptcy Adviser, My question is regarding bankruptcy after divorce. I have been divorced for two years. My ex-husband filed for bankruptcy this year in contempt of the divorce decree. He was given one large debt that I was also on, and the company is now coming after me to repay the debt. He also included a debt (in his bankruptcy) that was given to me, but I have been able to recover that account and repair my credit since I had no late payments.
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The only issue is this very large debt that was given to my ex. I have been advised by a bankruptcy firm to consult a divorce attorney to file for contempt, but the divorce attorney says I should file for bankruptcy. Can you tell me what the best thing to do would be? -- Tracey
Dear Tracey, Here is proof that not all lawyers are only interested in making money. Some actually tell you that another course of action, one that does not put money in the attorney's pocket, is the way to go.
There is a reason why you are being sent to and from these two types of attorneys. The divorce attorney probably thinks it is too expensive for you go after your ex-husband, and the bankruptcy attorney told you the bankruptcy will negatively impact your credit.
You see, there are a few things you can do in order to make a debt nondischargeable in bankruptcy. One of them is agreeing through a divorce that you will be responsible to pay the debt. Finalizing your divorce cements this obligation to pay, and the divorce agreement acts as a judgment for one spouse to use when necessary against the other. This means he cannot eliminate his obligation to pay this debt through his bankruptcy unless you file, too.
Unfortunately, the creditors don't care what your divorce agreement stated. You are still responsible to pay on this debt even if your ex-husband fails to pay. The divorce agreement does not wipe out your responsibility to pay, only that you can force another person to do so.
That is why the bankruptcy attorney told you to find a divorce attorney. The divorce attorney can force your ex-husband to continue paying. To do so, you need to go back into family court since there is no other way to enforce the divorce agreement without getting the court involved.
And that is why the divorce attorney suggested you file bankruptcy. You might not have the money to pay the divorce attorney to undertake this fight. The bankruptcy will wipe out your responsibility to pay on this debt as well as your ex-husband's responsibility.
You need to weigh the following factors to help make your final decision.
- What will the divorce attorney cost to file the requisite paperwork?
- Even if your ex-husband is found in contempt, what will it cost in attorney fees to get him to pay?
- Even if you did have the money, how long will it take you to get him to start paying?
- Can you afford to take on that fight?
- Is your good credit standing worth that fight?
- Can you afford the payment on this debt until you are able to force him to pay?
Sorry to give you only more questions than answers. This is an example of the cost of justice. Yes, you are in the right, but you need to determine what you can afford to prove it.