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mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 518
Experience:  Attorney with 13 years experience.
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How will my ex-husbands bankruptcy affect me? my ex-husband

Customer Question

How will my ex-husbands bankruptcy affect me?
my ex-husband and I legally divorced in July, in the divorce I was awarded the house and my vehicle, and he was awarded his vehicle under the stipulation that all things needed to be refinanced or sold within 12 months to remove the others name from the debt. He has just informed me that he will be filing for bankruptcy. He claims that it will simply wipe his name off of the mortgage and both auto loans (leaving me financially responsible for all) I am concerned that he is not being fully honest with me. Can someone please explain to me what affect his bankruptcy will have on this joint debt that we still have (mortgage & autos)
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Morning,

I will try to best answer your question.

Your ex husband's bankruptcy will not remove his name from title to real estate or vehicles. The bankruptcy will terminate his personal obligation on the loans for those assets. If you were paying the mortgage on the house and for your car this will have minimal effect upon you. It was still be best to refinance the house and your car into your own name so it has absolutely zero effect. When I say it has an effect I mean that you will still be able to keep the asset as long as you're making the payment but the loan will still be transferred to the company's bankruptcy department because one of the borrowers has filed even though it was not you.

Your x husband's vehicle is going to be the problem. If he is not going to retain it in his bankruptcy and keep paying it will fall on you to pay or end up damaging your credit. If your ex husband keeps the car and keeps paying it should not be an issue.

Here's where it gets a little tricky. I'm assuming you have a marriage settlement agreement. I'm assuming there is indemnity provisions regarding each spouse paying the debt they are assigned. Although your ex husband can discharge his obligation to the creditor, it is a different and and more difficult for him to discharge his obligation to a spouse. Depending on what type of bankruptcy and how he files he may not be able to discharge his obligation for indemnification owed to you under the marriage settlement agreement. If my assumptions are correct this means you could sue him for breach of the marital settlement agreement after the bankruptcy if he fails to identify you for costs and expenses incurred regarding the vehicle or other asset.

I know this is complicated and I tried my best to explain it. If you would prefer to have a phone conference I'll be more than willing to do so on as additional services provisions.