Expert: Terry Leeders - 1/19/2010

Question
We just got a divorce.  It was uncontested and the divorce decree states that I will pay 3 credit cards in my name only and also a personal loan that is in both our names to total about $25,000.  However, I may get laid off or quit my job and go back to school.  If this happens, I will file bankruptcy.  Will these debts be dishcharged even though they are in the divorce decree?  We live in Az and I realize they will go after my ex to collect.  Most of the debt was from her anyway.  Can she sue me for not paying even if they are discharged by bankruptcy?

Answer
Debts that are in your name only will be cleared in a bankruptcy case.  Your liability will be cleared for the loan too. However, since cosigned, they can then go after the cosigner.  She then can enforce your divorce decree to still get you to pay that debt.  So, while it would be dischargeable, you would still need to pay that debt because of the divorce decree.