How will BK court look at this?

[filingin08]

Husband has joint Discover card with ex-wife that had a zero balance at divorce. This card was not on the division of property statement. She did not close it and he used it predominantly for balance transfers from his Chase and AmEx. The charges are ours, no question.

She alleges he opened it with her name after the divorce. Credit reports (as I'm sure Discover can as well) verify it was opened during their marriage.

By my husband using it - was it theft? Fraud? I don't see either really as being the case - we did hope to pay. But am wondering how a BK will view. My guess is it will be considered an unsecure debt along with the rest.

After the fact, could the ex come after us to make her whole if she ends up paying? Part of me says "yes, it's obviously our debt." Part of me says "no, she knew he had it and left it open, not smart, but she's responsible in some way too."

We meet with an atty next week re the ex's motion to appear and show cause and will discuss with him. In the meantime, any thoughts?

[woeisme]

Well, it will really depend on what Discover card has in the way of the application (did she sign her name to it and forget? or did your hubby get this joint card without her knowledge and signature?) as to whether or not Discover can go after her for whatever isn't paid in your CH 13. I think her real fight is going to be with them, but admittedly don't know a lot about who has precedence, divorce court or BK court. (My gut says BK court tho).

Not to be mean, but your husband is the one who really knew he had the card and that it was left open in his ex-wife's name, if he was the one using it. I find it hard to believe that the ex, who went to the trouble to make sure their property and debts were separated at the time of the divorce, knew that he had the ability to make charges still using her name. Would you feel that you were responsible to pay for balance transfers if she made them to a card that he overlooked but had his name on? Would you just chalk it up to being "not smart enough" to anticipate that, and pay for her debts that were run up post-divorce?

[woeisme]

I just wanted to re-iterate that I'm not trying to be judgmental here, just how I would feel (and probably most people would feel) if the shoe was on the other foot and were the one who's credit was being affected by an ex's use of a joint credit card post-divorce. But I really don't think the fight is going to be between you guys and the ex, it will be between the ex and Discover card. She's going to use the motion she's filed to try to get ammo to use to prove to Discover card that the debts are not hers, which is ok as long as she doesn't prove that your hubby in some way was fraudulent to get or use the card, that would be bad since I don't think fraudulent charges can be discharged, and I'm sure your attorney will help you avoid that pitfall. Good luck!

[filingin08]

What's "right" and what's "legal" are two separate things.

Husband says they opened it together; she had knowledge. Is it right to stick her with the transfers, no. Is it legal, maybe. (Will be interesting to see what Discover has.)

In most cases a BK will protect only support type payments, not property settlement. [If he were paying a mortgage when she/kids were in the house, possibly this could be support. Unsecured debt, likely not so.] A creditor doesn't care what the divorce papers say, they want their money.

If she made transfers on an account he had open, I would fight it, but what grounds would I have? Especially when we knew or should have known?

When I divorced many years ago, I closed all joint accounts and paid them myself. I didn't trust my ex to do it. I believe my husband's ex was emotionally drained and since there was no balance, no statements, simply didn't think of it.

[Flamingo]

It appears the former wife thought the card was closed out because as you state in your posting, she indicated the husband opened it after the divorce. Why on earth would your husband continue to use a joint card from a former marriage - how long has he had that card? And using it without the wife's knowledge/permission? Unfortunately, if that card is put into your Chapter 13, it will involve his former wife. I suggest talking to an attorney and cutting up the card.

[filingin08]

I appreciate the look from the other side.

I don't necessarily agree with the way my husband has chosen to give his ex notice about our financial situation. He has kind of dragged her on. In his defense, she is the gatekeeper to his children and she uses that at will - promising we can have them and then changing her mind; making major life decisions without discussing it. Do two wrongs make a right? No. But I do understand his motivation.

[filingin08]

Flamingo: Why did he use it? He was trying to put off collections from Chase and AmEx. That coupled with the fact we both indulge each other's inner child with neither saying "no" to the other. Also, we kept most financial decisions separate until about a year ago. Dumb, huh? We're learning.

The BK will involve the ex-wife, regardless, as their are other debts he was assinged in the divorce (boat and car lease). She's suing us on those now.

[Flamingo]

I appreciate the look from the other side.

I don't necessarily agree with the way my husband has chosen to give his ex notice about our financial situation. He has kind of dragged her on. In his defense, she is the gatekeeper to his children and she uses that at will - promising we can have them and then changing her mind; making major life decisions without discussing it. Do two wrongs make a right? No. But I do understand his motivation.

Whoever has the children and visitation matters doesn't mean a thing when it comes to utilizing a joint card that should have been closed out at the time of the divorce because since there is no agreement as to that card's use and there is probably verbiate in the documents signed when applied for that if the parties divorce, the account needs to be closed. Usually in that situation the creditor will offer separate accounts for both parties. Your hubby could be dealing with fraud issues if he wants to get his ex involved in this. Definately discuss the situation with your attorney and that account should be closed out for no more use. Best of luck to you both.

[AngelinaCatHub]

If the husband knew the card was joint and at the time of divorce was zero, half that card belongs to the ex wife. To use it without permission is tantamount to fraud. Might not be on purpose, but the letter of the law is with the ex wife. I would attempt to pay that off real quick. But then you go into a “preferential” situation. The Hub needs to be real nice to the ex, and assure her that he will pay it off. He might be able to reaffirm this debt so that the ex wife is not brought into this bk and have her credit dinged when she is innocent. Ms. Fileingin08, you asked for advice or opinion. I don’t mean to sound accusative, only practical. If I were an ex and that was done to me, I’d be pretty upset. Just my opinion. ‘Hub

[filingin08]

AngelinaCatHub: I would be upset too as I know his ex is.

We don't have the means to pay ($12k).

How did he use it w/o permission? Couldn't you also argue that SHE should have known it was on her credit and SHE should have closed it if she didn't want him to use it? Could there not be some implied permission simply by letting it remain open? Given they've been divorced for awhile, should also there have been some due diligence on her part to review her credit?

Certainly what he did may not be ethical but fraud? How? He was a joint owner of the account. Should he pay all of the debt? My opinion is yes. But in a BK, legally does he have to?

Her credit has already been affected.

[filingin08]

Flamingo: I understand visitation and credit use are as alike as oil and water.

Interesting thought on the paperwork signed when the account was opened. (Seriously, thanks!) I wonder what, if any, language pertains to divorce. Any idea how we get a copy? Assume just contact Discover and ask.

The account is closed and we will be talking to the atty next week.

[woeisme]

I think Discover should be able to give you a copy of the paperwork signed. If not, then they are going to have problems getting anyone to pay it, since they have to provide the Trustee with paperwork showing the debt is owed, so I'm sure they can access it.

I assume since you are writing in the CH 13 forum that you will be planning on filing CH 13. So some of this debt will be re-paid over the course of your plan unless you are able to file with 0% to unsecured. So at worst all Discover could come after the ex for is the remaining portion. Whether or not she has legal ground to stand on there is her problem I think, although with kids involved, when an ex has a problem, then they unfortunately get dragged into it. If your hubby is paying his child support on time and has a court ordered custody agreement, then he has every right to see them no matter what she tries to pull, and can't legally use this against him. He can drag her butt into court if she violates the custody agreement if she wants to play that game, he just needs to start documenting it when she doesn't follow through on letting them visit. My husband's ex was the same way, wanted her checks and us to take the kids at the drop of a hat when it was convenient for her, but would change her mind at the last minute about letting us have them when it was already planned in advance, so my hub had to put his foot down and drag her to court when a whole month went by without visitation. So I feel your pain.

[filingin08]

Thanks.

The only way for us to protect ourselves against the ex (including the likely judgement she will get on boat/lease) is to file 13. In a 7 while you are free from the creditors, but the ex can still enforce the hold harmless agreement (i.e., you have to make her whole). In a 13, we're protected from her as well. I feel badly that this might force her into her own BK. Esp, now that she too is remarried. Sigh. What can you do? We've made poor decision after another and BK looks to be our only option.

I know this is unlikely, but wouldn't it be wonderful if Discover never answered or put in a claim (or whater it is called)? Then we could wash our hands of at least this piece of it all.

It is really sad that finances and kids cannot be completely separated. I truly think that if we hadn't dragged the ex into this financial mess, she would be more than fair with the kids. As it is, she holds husband to the letter of the agreement and gives him an earful if he's early/late or wants to modify his weekly visitation (see them on Thursday vs. Wednesday). That is, unless it's beneficial to her.

I can see both sides, so it sometimes makes it hard to be 100% supportive of husband's decisions. But I love him, so I try.

Thank you for your thoughts and kindness.