When an ex files for bankruptcy

[Sugaree5335]

First of all I hope this is the right forum. I've been lurking for a few days and thought that this was a good place to ask for advice.

My ex husband filed for Chapter 13 bankruptcy protection. He listed two joint debts in his filings. One was his vehicle which had been repossessed and the other was the house which was foreclosed. The way I understand it, I am under a co-debtor's stay until his BK is dismissed or discharged. Does anyone know how this stay affects the statute of limitations on these debts? As it stands, the stay will end in about two years. If the SOL is not tolled then the creditors will have about 6 months to pursue any kind of deficiency judgment against me for the house or car.

I'm not necessarily trying to get out of paying the debt, but I'd like to have a head's up about what is possibly coming and have a plan in place to deal with it.

[disneysteve]

Why are there debts in your name with your ex-husband? That should all have been taken care of at the time of your divorce.

[maat55]

You might find your situation on this page.

Limitation periods » Statute of limitations - Zyklop Inkasso

[bjl584]

Originally Posted by disneysteve

Why are there debts in your name with your ex-husband? That should all have been taken care of at the time of your divorce.

It should have been but it always isn't. My friend went through a divorce a couple years ago. His wife was awarded the car which had a loan attached to it. My friend was ordered to pay her alimony in the amount of the car payment until the car was paid off (a little over two years.) Sounds simple enough, but his ex wife never made the car payment with the alimony money. She spent it on other things. The car got repo'd and my friend's credit got trashed in the process. I have no idea why he or his attorney made sure that car was out of his name at the time of the divorce, but it wasn't. And now there is nothing that he can do about it.

[Scanner]

I always thought at saving advice, a seperate forum (of which I would helpfully moderate) should be made for divorce, since it is a Major Life Financial Event.

The truth is divorces can settle anyway that is agreeable upon with the 2 parties with representation.

I had actually been pushing for a "Birdnesting" agreement with my kids where we both stayed as owner of the house, we both raised the kids in our house and then took proceeds. I would stay on the mortgage (debt) and deed (assset).

My attorney highly advised against it, citing his reasoning that a lot can happen in 10-15 years until the children were grown - liens on teh house, a lawsuit. . .he preferred a total financial split.

Why this didn't happen in this case, who knows. . .but usually, you just can't take off a person on an asset, when there is a liability attached to it.

In other words, my ex-wife had to "remortgage" her house. . .I couldn't just get off hte mortgage and the deed because I was divorced. I was legally bound. So the process became I signed a QuitClaim Deed at my attorney's office, it was held in escrow at her attorney's office, and then she proceeded to remortgage. I then got a pay-off letter.

I'd imagine it's the same case with an auto loan. . .if there is a lien oustanding on the car, the title and note would be held against it until satisifed.

Optimally, the car should have been paid off or gone to the person who drived it. We both had paid off cars and she got the nice one and I got the clunker, cause I'm the guy, I guess.

[Scanner]

Sugaree,

I would pony up $300 for an hour consultation with a bankruptcy attorney yourself.

It's well worth the money for an hour of time for his/her expertise to see what you are obligated for and what your options are. Maybe the co-debts can at least be restructured.

I think this question is so complex, it's just beyond the scope of this forum.

[cypher1]

Originally Posted by Scanner

I always thought at saving advice, a seperate forum (of which I would helpfully moderate) should be made for divorce, since it is a Major Life Financial Event.

While I'm not married, a separate category for Marriage/Divorce or Major Life Financial Event would be an awesome idea. Gives another perspective (or warning )for those of us wanting to take the next step in life.

[JoshuaHeckathorn]

It's a rather common credit myth that a divorce decree will absolve someone from credit obligations the judge decides their ex-spouse will be responsible for paying. The fact is the original contract with the creditor trumps everything, so individuals would need to work directly with their lender to refinance if they wanted their name removed from anything they jointly signed before the divorce. Unfortunately, that step is often missed and people find out the hard way when things go South fast and their credit gets destroyed.

Also, I'm certainly not a lawyer, but my understanding based upon speaking with some friends that have gone through similar situations is that the co-debtors stay doesn't toll the SOL in chapter 13. It keeps on running as usual. This is definitely something you should have a good attorney take a look at though, as rules change from state to state.

[Sugaree5335]

I'm going to try to hit on as many points as possible in this post. Hopefully I address everything...

I knew that I would not be released of any joint debts when I left regardless of the divorce ruling. At that time my sanity was worth more to me than my credit score. I figured that in 5 years I was going to have bad credit anyway because that's where it was headed, or I could be happier and have improving credit. He had a bad habit of running up credit card bills without regards as to how they were going to be paid (any cash he got went to supporting his drug habit so the "allowance" system obviously didn't work). Then told me that we couldn't have kids because the cost would dwarf his Amex bill. I know...the logic doesn't make sense to me either I should have never stayed as long as I did. I finally had enough and got a spinal implant.

He did get the vehicle. I didn't want it. I have an older paid-off version of it that I love and still drive to this day. No, it's not great on gas mileage, but it's my baby...and did I mention paid for? I plan on driving it until the wheels fall off. He was supposed to pay for his vehicle as per the divorce agreement, but I knew that was unlikely to happen. I was unwilling to pay for him to keep driving his toy. Especially he threatened to ruin my life forever (wonder how that's working out for him).

I did speak to a couple of bankruptcy attorneys yesterday after I wrote the first post. One says that the SOL is tolled and one says that it is not. I find it highly unfair that he can get off pretty much scot free and I'll have this hanging over my head for an additional 5 years, but who knows. One attorney said that if they were planning on suing me then they would have filed a motion to lift the co-debtor stay already. So, I still don't know. I guess I should start planning on the worst and hoping for the best. It should be about 2.5 years before anyone could come after me without lifting that stay.