Divorce and Debt Responsibility
Date: Sat, 12/12/2009 - 08:11
She and her spouse are considering divorce.
They have several debts, he wants to keep the home, there is no equity in the home so she is considering the following compromise.
He take ALL the debt and she sign over the house. He is filing bankruptcy anyhow so he would be debt free eventually.
The problem;
Some of the debts (credit cards turned over to collection agencies) are in her name only, however, he also used the credit cards during their marriage. One of the collection agencies received a default judgment against her and has a garnishment on her wages but she is unemployed.
With this in mind, if her husband agrees to take on the debt, and the domestic relations court grants the divorce with these conditions, and he files bankruptcy, will this release her from the responsibility of the debts?
How can she have the garnishment lifted once the courts award all the debts to him?
Is this even a possibility?
Nope....debt is will stay in her name only. Divorce papers do n
Nope....debt is will stay in her name only. Divorce papers do not change who owes the debt, just who is responsible to pay it but even then, divorce papers mean nothing to a creditor....they do not have to abide by it.
Quote:Originally Posted by SOAPLADYNope....debt is will stay in
Quote:
Originally Posted by SOAPLADY Nope....debt is will stay in her name only. Divorce papers do not change who owes the debt, just who is responsible to pay it but even then, divorce papers mean nothing to a creditor....they do not have to abide by it. |
Hmmmm, so, even if a judge gives the debt to the husband (that was made during the marriage), a debt collector does not (by law) have to abide by the judges ruling?
Correct. The judge can enforce sanctions against the spouse for
Correct. The judge can enforce sanctions against the spouse for not paying the debt but the wife would have to haul him back to court first.
SoapLady is 100% correct. If a creditor was to file suit agains
SoapLady is 100% correct. If a creditor was to file suit against her and obtain a judgment, even though he signed off it would be his responsibility, she would have to file suit against her ex in court to obtain the money to repay the creditors. Even then she would still have judgments again her which are never fun.
She said she is going to an attorney for the free consultation,
She said she is going to an attorney for the free consultation, I will let you know what the outcome is.
Shaz, The lady is right. Also: Because your friends credit is
Shaz,
The lady is right.
Also:
Because your friends credit is already hammered and she is not working, why has she not considered the BK option for herself?
She cannot have an actual garnishment on wages if she is not working but when she does find work that can be the eventuality.
If the house note is in both their names it can also complicate things post divorce.
If getting divorced and bankruptcy looms, it can be a benefit to get that done prior to the divorce.
She certainly has a lot to consider.
Mileage may vary
Shaz I think it would depend on what state they are in as well
Shaz
I think it would depend on what state they are in as well because when I got divorced I signed over the house to my ex (we were upside down in it anyhow) and I took three of the cc that were his name only... paid them off etc... etc... I think there is a way that they could do it.
Though I think an attorney may at this point suggest that they file for bankruptcy together PRIOR to the divorce so that there is a cleaner slate to start with.
It could depend on the state. WA is 50/50 so even if the debt WASN'T really mine.... I had to take some of it to even out the liabilities that we had.
