Can bankruptcy bail you out from paying?

Previous | Next
 rated by 0 users
Latest post 10-07-2009 9:40 AM by SPlum. 4 replies.
  • 09-24-2009 11:12 PM

    • Mark07
      Consumer
    • Not Ranked
    • Joined on 06-26-2009
    • CA
    • Posts 18

    Can bankruptcy bail you out from paying?

    I just got my divorce finalized and I won a judgment. Can my ex file for bankruptcy and get bailed out from paying me? Is there any options to prevent them from doing so?  Thanks

  • 09-24-2009 11:46 PM In reply to

    Re: Can bankruptcy bail you out from paying?

    Mark07:
    Can my ex file for bankruptcy

    Certainly.

    Mark07:
    and get bailed out from paying me?

    Depends on what the judgment entailed.

    Child support and alimony and debts in the nature of support are not dischargeable according to (11 U.S.C. 523 (a)(5) and  523 (a)(18)).

    I have read that some states treat all divorce decree obligations as being support. You'll have to talk to a CA bankruptcy attorney to find out how CA treats it.

    Mark07:
    Is there any options to prevent them from doing so?

    You cannot prevent your ex-spouse from filing.

    But you can petition the bankruptcy court to deny discharge of the divorce related debts.

    Again, a CA bankruptcy can give you an idea of how that works.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 10-07-2009 8:33 AM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,058

    Re: Can bankruptcy bail you out from paying?

    Essentially, your ex can file bankruptcy and "get relieved" of paying joint debts to a creditor that the marital property settlement made his financial responsibility.  Your creditors are not a party to your divorce.  If you both borrowed money to buy a car, for example, then you both agreed to pay regardless of what happened down the line.  If the marital property settlement gave the car and the loan to the ex, the creditor gets to disregard that one if the receiving spouse does not pay or is relieved of the debt via bankruptcy.  If you wind up paying, your legal recourse is against the ex, not the creditor.

    Your ex cannot get out of paying you via bankruptcy, if you wind up paying the creditor when the ex should have.  You can haul him or her into family court and get a judgment that s/he owes you.

    Also, support obligations, such as alimony, spousal support, child support, and requirements to pay for medical care of children generally are not dischargeable in bankruptcy.

  • 10-07-2009 9:30 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,151

    Re: Can bankruptcy bail you out from paying?

    Laymans take:

     

    Ask bankrupcy lawer of your choice--not the enemy's!

    Its not clear what you mean by you got a judgement.

    If A gets an ordinary judgement that B owes A $2500 then A is generally an unsecured creditor and A stands to get wiped out if B declares bankrupt and there is not enough money to pay off unsecured creditors.

    If you meant you got CS or alimony that likley not wiped out.

    If you meant the divorce order said B is to pay the joint A/B credit card debt of $20,000 +/-  and B files bankrupt , well B need not pay the CC directly and CC firms can pound A to pay and A will get stuck to pay.   A can sue B to perform as ordered in divorce -and seek contempt charges -but that may be a laugh as impossibility to pay is generally a good defense and B walks free.

    The better defense is to actually get paid and/or have the payment secured by a recorded first lien position on some valuable asset the other person holds in own name .  Or in hindsight to have the order spell out some rather Draconian outcomes if the person fails to pay and have it crafted such that the outcomes survive any bankrupcy or impossibility to pay --example might be --A to get  home and is to refinance and pay B $50,000--but might be wiser to add that A must refinance and pay $50,000 in 90 days or upon default the title is awarded by order of court to B.

     



  • 10-07-2009 9:40 AM In reply to

    • SPlum
      Consumer
    • Top 75 Contributor
    • Joined on 03-11-2008
    • Posts 915

    Re: Can bankruptcy bail you out from paying?

    Everyone is correct in that child support, alimony or maintenance are not dischargeable in a bankruptcy.

    However, property settlment agrements can be eliminated in a chapter 13 bankruptcy.   Chapter 7 - not supposed to be able to, however, there is varying opinions regarding this.

    If he files bankrtupcy, you need to hire a bankrtupcy attorney in his area (if it is different than yours) and file an objection to him listing you in his bankruptcy so his debt to you survives the bankrupcy. 

     

     

Page 1 of 1 (5 items) | RSS

My Community

Community Membership New Users: Search Community