Expert: Norma Duenas - California Bankruptcy Attorney - 11/5/2010

Question
When I got divorced, I agreed to take all of the credit card and house debt even though I couldn't afford it.  He was threatening to take the kids and he had a lawyer (I couldn't afford one).  I know it was a huge mistake.  We met with a bankruptcy attorney yesterday and I qualify for Ch. 7 hands down, but he makes just a little too much to do so.  He says he has a lot of disposable income right now and will have to pay a lot per month in Ch. 13.  He is now saying he will sue me for what I couldn't pay, but I literally have nothing.  The house is in foreclosure, I pay on my van regularly because I need a vehicle for my boys and to get to work.  What are the chances he can get anything from me?  

Answer
You may not be able to discharge some of your debt in a Chapter 7 bankruptcy. If you agreed to take on the debt as part of the divorce and your divorce agreement has a hold harmless clause for any of the debt that was assigned to you then the debt will not be discharged as part of your Chapter 7 bankruptcy. If your divorce agreement has a hold harmless clause that agrees to indemnify your husband for any debt that was assigned to you then it cannot be discharged as part of a Chapter 7 bankruptcy. Under section 523(a)(5) or 523(a)(15) of the bankruptcy code debts assigned to you as part of your divorce decree will not be discharged.

You can discharge the debts as part of a Chapter 13 bankruptcy if the debts are not in the nature of domestic support obligations such as child support or alimony. If feasible you can consider filing for Chapter 13 bankruptcy and paying a small monthly payment in order to get these debts discharged. The bankruptcy code allows debts in the nature of property settlement agreements in a divorce to be discharged as part of a Chapter 13 bankruptcy.

You should consult first with a divorce attorney to have your divorce documents reviewed and examine whether you have a hold harmless clause as part of your divorce decree.

If you have further questions you can contact me at (951) 241-8070 or http://www.socaladvocates.com/riverside-bankruptcy-attorney