Bankruptcy Following a Judgment of Divorce

“My ex-spouse filed a bankruptcy and creditors are now coming after me…but he/she took the debt in our Judgment of Divorce.”

A divorce is final and you believe everything is resolved, all prior ties are cut, and it is time to move on with the next path in life. Than the phone begins to ring, a creditor is saying you owe money. You pull out your Judgment of Divorce, tell them your ex-spouse took the debt, and they tell you its irrelevant, either pay the debt or they will sue. You are wondering how this is possible?

Unfortunately, a Judgment of Divorce does not cancel the credit contract you and your spouse had with a creditor. A creditor has the right to come after one or both of you regardless of who took the debt during the divorce. Unless your ex-spouse refinanced the debt of out of your name, you both remain liable on the balance after divorce.

When one spouse files a bankruptcy, the full balance owed is now the obligation of the other, despite a Judgment of Divorce. But that does not mean you are without recourse. While you are not going to be able to fight the bankruptcy, many Judgments of Divorce will have a “non-bankruptcy clause” built into the terms. That means if your ex files a bankruptcy and leaves you with the debt, you actually can go back to family court, show them the money you had to pay out of pocket on their debt, and ask that it be turned into an alimony order so that they have to pay you back. It may be a more lengthy process, but it will refund you the debt you were not supposed to be responsible on.

Please contact our Westchester Bankruptcy Attorneys today at (914) 864-2465 or (845) 628-4301 to discuss which option is right for you. Our Westchester lawyers will work with you to manage your debt and help you understand your rights under the Judgment of Divorce.