Expert: Norma Duenas - California Bankruptcy Attorney - 6/10/2011

Question
I FILED CHAPTER 13 BANKRUPTCY OVER A YEAR AFTER MY DIVORCE. I WAS GIVEN A JOINT CREDIT CARD THAT I WAS TO PAY. THE ACCT WAS PAST DUE AT THE TIME OF THE DIVORCE, I WAS BEING GARNISHED BY A JOINT CREDIT CARD COMPANY AND FORCED INTO BANKRUPTCY. I LATER CONVERTED TO A CHAPTER 7. MY XHUSBAND WAS NOTIFIED AND SENT COPIES OF BOTH THE 13 & 7 BANKRUPTCY. HE DID NOT FILE AN OBJECTION WITH THE COURTS EITHER TIME. HE HAS NOW RETIRED AND OWES ME MONEY. SINCE I FILED BANKRUPTCY THE CREDIT CARD COMPANY WENT AFTER HIM AND HE PAID THE REMAINING BALANCE. HE HAS NOW RETIRED AND OWES ME MONEY. HE IS STATING THAT I HAVE TO PAY HIM BACK FOR THIS CREDIT CARD. MY QUESTION IS SINCE I WAS DISCHARGE IN BANKRUPTCY AND HE DID NOT OBJECT, DO I LEGALLY HAVE TO PAY HIM BACK. I UNDERSTANDING WAS ONCE DISCHARGE IN DEBT NO CREDITOR OR PERSON COULD COME BACK ON YOU FOR THE DEBT.

Answer
If you were assigned the debt as part of your divorce decree it probably contains a hold harmless clause. The hold harmless clause is a statement in which you agree to protect your ex-spouse against potential liability for the debt. The hold harmless clause in your divorce decree is a non-dischargeable obligation in a chapter 7 bankruptcy. Although the creditor cannot seek to collect the debt against you after the discharge, your ex-husband could try to enforce the divorce decree.  This means that your ex-husband could potentially go to court and try to enforce the divorce decree and have you pay the debt that was assigned to you. The hold harmless clause in the divorce decree is seen as a debt incurred as part of a divorce or separation agreement and therefore non-dischargeable. Your ex-husband does not need to file an objection in order for it to remain non-dischargeable.

You can find further information here:
http://www.socaladvocates.com/blog/divorce-decree-debt-in-bankruptcy/