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cortrightlaw
cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
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I was illadvised to file bankruptcy before my divorce ordered

Resolved Question:

I was illadvised to file bankruptcy before my divorce ordered decree. My now ex-wife did not file bankruptcy and now is socking it to me for the halk of the non-securred discharge debt. She comes from a wealthy family and is using finances to bury me. I am a wreck.

Is there any provision to reopen by bankruptcy to reallocate the debt for relief?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cortrightlaw replied 5 years ago.

cortrightlaw : Have you already received your discharge and if so when?
Customer:

I recieved the dscharge in october 2010

Customer:

I recieved the ordered decree Janurary 2011

Customer:

Chapter 7

Customer:

Hello?

cortrightlaw :

I do not think it matters as Bankruptcy law reforms make non-support obligations from a divorce non-dischargeable in a Chapter 7 case, your x would have been able to file a claim or objection to the discharge of the debts your are being stuck with as a result of a divorce degree.

cortrightlaw :

Sorry got locked out of the question for a little bit.

cortrightlaw :

You listed the debt so the creditor can not come after you but even if you had listed the debt assigned to you by the family law court your X could have brought an adversary proceeding to make it non dischargeable. Below is a more detailed explanation.

cortrightlaw :

To be clear, there is no question that a bankruptcy, which is a function of Federal law and not of state law as divorce decrees are, will discharge either divorcing spouse from an obligation to pay the creditor. That creditor, after the bankruptcy discharge, is barred by the Federal bankruptcy discharge injunction from pursuing a collection of the debt or from failing to report it to the credit bureaus as discharged in bankrutpcy. However, if the divorce decree obligates the bankrupt spouse to some or all of a joint debt shared with his or her ex-spouse, a failure to continue to pay that debt may incur a liability for breach of the divorce decree to the ex-spouse.


In other words, the ex-spouse is a creditor of sorts for that same debt.


It is possible to list the ex-spouse as a creditor in the bankruptcy petition in order to discharge that level of the obligation along with the bank or credit union holding that actual note or contract, but the discharge of that obligation may be non-dischargeable under the Bankruptcy Code. The Code, in Section 523(a)(15), states that an obligation of this sort to a spouse, former spouse, or child that arises from a court order or divorce decree is not dischargeable.


However, for this debt to be found to be non-dischargeable, the former spouse must file what is called an adversary proceeding in the bankruptcy court seeking to have the court declare the debt to be non-dischargeable. This adversary proceeding is a civil lawsuit within the Bankruptcy Court, and the former spouse filing the suit bears the burden of proving that his or her harm in having the debt discharged is greater than the bankrupt spouse’s harm in continuing to pay it.


More interesting is the fact that Section 523 applies only to Chapter 7 bankruptcies and not to Chapter 13 bankruptcies. Thus, a marital debt obligation arising from a “hold-harmless” clause or other obligation arising from a marital divorce decree or separation agreement that is not dischargeable in Chapter 7 may be discharged if the obliged spouse files Chapter 13.

cortrightlaw :

Have I satisfactorily answered your question? If I have please remember to click the GREEN ACCEPT BUTTON so that I will receive credit and compensation for my time (doing so does not end our discussion), i will gladly clarify my response or respond to follow up questions if needed.

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