What Happens When My Former Spouse Files for Bankruptcy?

Divorce is costly. Not only are legal fees for divorce high, but the lack of joint income after divorce may propel one or both spouses into financial instability. 

If your ex files for bankruptcy, and you have taken out joint debts in the past, you may be 100% liable for those debts if your ex defaults on them or is discharged from them. You may be liable for such debts whether you borrowed jointly or cosigned for the debt. You also may be liable for marital debts you were unaware of.

In many cases, the finalization of a divorce may not completely unwind financial entanglement with your ex. It is a common misconception that as long as your spouse is made responsible for the joint debt in the divorce judgment/decree, you are free and clear of the debt. If both parties took on the debt together, the creditors will go after both parties, regardless of “fairness.” This is known as joint and several liability. They will turn to you to pay up if your ex-spouse fails to pay.

What to Do If Your Ex Is Filing Bankruptcy

If you find out that your ex is filing for bankruptcy, the first step you should take is to obtain a copy of your credit report to see if any of your ex’s debts appear on it. You can get one free copy of your credit report per year. This report can be obtained at annualcreditreport.com. If you find debts on your report that your former spouse incurred, review your divorce decree and see if these debts were resolved as a result of your divorce or check if the decree requires one spouse to pay another’s debts.

If You’re Listed as Joint Obligor

If you are listed as a joint obligor of any of the accounts listed in your ex-spouse’s bankruptcy petition, the creditors will notify you. When this occurs, you have two choices: take your ex-spouse to court to enforce the divorce agreement or file bankruptcy.

If your ex-spouse filed a Chapter 7 Bankruptcy, you can take them to family court to ask the judge to force them to pay you for the debts they’re attempting to get rid of through the bankruptcy petition. 

If he or she filed for Chapter 13 Bankruptcy, however, you may have no way of forcing him or her to pay up. If you have enough money to pay the debt and do not want to deal with suing your ex (or if the amount of debt is less than taking him or her to court), it may be wiser and easier to pay the creditors, or you may need to file bankruptcy yourself.

If you were not notified of the bankruptcy and need to find out if your ex filed for bankruptcy, you can find out which district he or she would have filed in, usually her place of residence. You can search the online court records system at the appropriate bankruptcy court website or inquire in person at the courthouse.

As a former trustee for the U.S. Bankruptcy Court, with over thirty years experience, Attorney Martin Long is an expert in the industry with decades of experience in Bankruptcy Law in Colorado. We serve Aurora, Centennial, Highlands Ranch, Denver, Littleton, Lone Tree, Castle Rock, Colorado and the Denver metro area with three convenient locations. For help with your financial matter, call the Law Office of Long & Long P.C. for a free initial consultation at 303-832-2655.