If you’re filing bankruptcy after divorce, there are some debts that your ex-spouse will still be responsible for and a few ways bankruptcy may uniquely impact them. Here’s what you need to know:
- Your spouse is still responsible for debts where they are a co-applicant. For example, if you discharge a credit card debt in Chapter 7 bankruptcy, the creditor may pursue your ex-spouse for payment. While you can discharge your obligation to pay a debt, you can’t discharge your ex-spouse’s payment obligations.
- If you’re filing Chapter 13 bankruptcy after a divorce, you will be responsible for repaying any debts attached to your name even if your ex-spouse is responsible for creating the debt. For example, if you’re on a payment plan designed to repay a $3,000 credit card, you will be 100% responsible for paying it. However, the credit card company may still go after your ex-spouse if they don’t get all of their money back via your Chapter 13 bankruptcy repayment plan.
- If you and your ex-spouse own property together that is not exempt, the bankruptcy court may liquidate the property and use your portion of the proceeds to repay your creditors. In this case, your ex-spouse would lose the property but would receive their portion of any proceeds earned from the liquidation.
Each bankruptcy case is different, so before you file bankruptcy speak with an attorney about how filing will impact your ex-spouse.