Tell me how your cc debt from divorce decree was treated in BK13

[Dirk Squarejaw]

I posted in the general forum but didn't get many answers (probably because my thread title was a little misleading) other than that debts in the divorce decree cannot be discharged. Hoping maybe some of you BK13ers can chime in.

After a bunch of research online, I came across a few sites dealing with new BK law and divorce decrees. You cannot discharge these debts in a BK7, however they can be paid back at a reduced rate in BK13 and whatever is not paid in full is discharged at the end. So does it end up getting treated like other unsecured debt and just gets paid back in the plan at whatever you can afford in your disposible income?

Who's gone through this and how were these debts treated in your bankruptcy?

[HHM]

I believe, in a chap 13, divorce related debt gets treated as priority debt (meaning, that debt gets paid before general unsecured debt).

It is not so much that debts that are divided in a divorce decree are not dischargable, in fact, they are...but with a catch.

Lets suppose that there is a Chase Visa with a $12k balance and the debt is divided in a divorce decree ($6,000 each) and one spouse file BK-7, the debt (all of it) IS discharge as between the filing spouse and Chase Visa. However, the filing spouses obligation to pay the debt as part of the divorce decree is NOT discharged. If both spouses file BK-7, then any obligation to repay that debt is discharged.

These scenario's can get very complicated when it comes to joint accounts vs. individual accounts, community property estates, etc. So please direct any "specific" scenarios to your attorney.

[Dirk Squarejaw]

OK, I gotcha. In my case its a BofA (formerly MBNA) line of credit in which the ex was a cosigner. Our decree simply states that I am responsible for this debt and that I will hold her harmless.

I've been collecting documents, etc. and will be meeting with lawyers starting around fall break here at school. Ever since I discovered this little snag with divorce decrees, I've been trying to get an idea of how complicated this is going to get. Otherwise, my case is pretty straightforward with everything up-to-date at this point but barely scraping by until next month when I start getting behind on payments. I just don't want to go into the lawyer's office and look completely clueless.

I can't wait to get with a lawyer and get this rolling....

I believe, in a chap 13, divorce related debt gets treated as priority debt (meaning, that debt gets paid before general unsecured debt).

It is not so much that debts that are divided in a divorce decree are not dischargable, in fact, they are...but with a catch.

Lets suppose that there is a Chase Visa with a $12k balance and the debt is divided in a divorce decree ($6,000 each) and one spouse file BK-7, the debt (all of it) IS discharge as between the filing spouse and Chase Visa. However, the filing spouses obligation to pay the debt as part of the divorce decree is NOT discharged. If both spouses file BK-7, then any obligation to repay that debt is discharged.

These scenario's can get very complicated when it comes to joint accounts vs. individual accounts, community property estates, etc. So please direct any "specific" scenarios to your attorney.

[HHM]

That scenario is actually fairly simple

Assuming you qualify for a chap. 7 in the first place...you should file chap 7. Here is what would probably happen.

You will list the BofA account on your BK Petition as normal, and that will get discharged as between you and BofA (i.e BofA cannot take any action against you do collect the debt). With your ex-spouse being a co-signer, BofA would normally go after your spouse to pay back the loan. However, since this debt was assigned to you in a divorce decree, you cannot discharge your obligation to your spouse to pay this debt, and therefore you would have to continue to pay the debt.