Are You Responsible for a Spouse’s Debt After Divorce?

Getting married often means intertwining your finances with your spouses. If you get divorced, does that mean you are responsible for your ex’s debt?

You might be responsible for your spouse’s debt after divorce and be named as a co-debtor in a bankruptcy case. Spouses often share credit card and mortgage debt, though any debts solely in their name should be theirs alone to repay. Bankruptcy cases involving ex-spouses can be complicated, depending on the number of creditors involved and the means of repayment. For example, if you still share assets with your ex, they could be at risk of liquidation if Chapter 7 is filed. Alternatively, Chapter 13 could protect shared assets and give both exes time to repay shared debts according to their incomes and expenses.

For a free case assessment from Young, Marr, Mallis & Associates, call our bankruptcy lawyers at (215) 701-6519 or (609) 755-3115.

Am I Responsible for My Spouse’s Debt After Divorce?

Generally speaking, your spouse’s debts are theirs and yours and your own, during or after marriage. So, if you get divorced, you may not be responsible for any debt that is solely in your ex-spouse’s name.

There are exceptions to this, such as living in community property states, co-signing loans, or being on joint credit cards with your spouse. If you are tied to the debt in any way, you will still be on the hook for it with your ex, even after divorcing them.

Any debt your ex-spouse took on before marrying you may stay theirs to repay, like student loans or personal credit cards. How you manage your finances during marriage, such as keeping separate credit cards, could protect you from a spouse’s spending habits or poor financial decisions, as accruing joint debt could cause additional hardships, such as difficulty being approved for a mortgage or car loan.

If you are responsible for a spouse’s debt after divorce, creditors might approach you for repayment. Creditors could send harassing calls or mail, attempt to garnish your wages, or repossess your assets to collect on an ex’s debt you share. Addressing this as soon as possible is crucial so that your credit score does not continue to be affected by an ex.

Untangling your debts before separating from your spouse, closing joint accounts and shared credit cards, and itemizing all shared debts is important so that your credit score doesn’t drop without you knowing and you aren’t shocked to be named a co-debtor in a bankruptcy case.

Will Your Ex-Spouse Be Part of Your Bankruptcy Case After Divorce?

Depending on how debt is accumulated during a marriage, both spouses may be liable for repaying it, even after divorce. For example, if both parties are on the mortgage contract, that is both of their responsibilities to manage, no matter how successful their marriage is.

Financial hardships during marriage could require one or both spouses to file bankruptcy. Even if you have since divorced your spouse, they may need to be part of your bankruptcy case if you share debt, as many spouses do. You or your ex could be responsible for one another’s debt because you shared credit cards and bank accounts. Accruing joint debts is common during bankruptcy, and those debts do not just disappear when a marriage dissolves. Creditors may seek repayment until they get it, even filing lawsuits and foreclosure petitions against debtors.

In bankruptcy cases involving ex-spouses, our lawyers can review each party’s finances, see how they are intertwined, and confirm their shared debts. We can then identify the appropriate bankruptcy chapter to file and proceed accordingly so that you can address the situation as quickly as possible.

Your ex filing for bankruptcy, or your spouse for that matter, does not necessarily affect you if you are not a co-debtor in the case. Even if you are still married, your credit score will not drop if your current spouse files and completes bankruptcy. This is one of the reasons spouses intentionally keep separate credit card accounts after marriage.

What to Do if You Are Responsible for a Spouse’s Debt After Divorce

Whether you were listed as a co-debtor in your ex’s bankruptcy petition or you are filing a case yourself involving your ex-spouse, our lawyers can help you proceed.

A co-debtor’s income doesn’t necessarily affect the bankruptcy chapter the primary debtor can file. So, if your ex’s income alone would place them into Chapter 7, but your income would put them over the threshold to file Chapter 13, the court wouldn’t necessarily consider that. However, avoiding Chapter 7 in these cases might be ideal, as exes could still share assets that neither of them wants to be liquated, which Chapter 7 may require after discharging eligible debts, like credit card debt.

What matters is filing the appropriate chapter for the situation, as otherwise, both debtors could be negatively affected. While many exes share dischargeable credit card debt, leading to Chapter 7 filings, others share mortgage debt, which is non-dischargeable. If you are a co-debtor in a case involving your mortgage lender, our bankruptcy lawyers may suggest filing Chapter 13, as that will protect assets from liquidation and give you and your ex several years to repay. Repayment plans for shared debts will consider both debtors’ incomes, and our lawyers can draft these plans for court approval to ensure they are fair.

Being responsible for a spouse’s debt without knowing it, like credit card debt, could substantially affect your credit. While being a co-debtor in a bankruptcy case will also make your credit score drop, it will let you address any shared debt head-on and eliminate any remaining financial ties to your ex after divorce.

Call Our Lawyers About Your Bankruptcy Case Now

For a free case review from Young, Marr, Mallis & Associates, call our Allentown, PA bankruptcy lawyers at (215) 701-6519 or (609) 755-3115.