Ex won't close joint card, filing bankruptcy

[CMS2016]

What is the name of your state (only U.S. law)? NC
We live in N.C. and my husband just won a judgment against his ex-wife for violation of full disclosure, which affected their equitable distribution. This week he was awarded @ $60K. She still uses a credit card that is jointly held in both their names and was ordered to transfer the balance to an account in her own name within 30 days. He now believes she is planning to file bankruptcy hoping the unsecured debt she owes him will be discharged. Furthermore, she has no intention of transferring his name from her card, knowing he will be liable for the $13,000+ still outstanding. Is there anything he can do to protect himself from the credit card balance if she refuses to comply with the court to remove his name? Would her debt to him be considered non-dischargeable since it was incurred on the basis of fraud?

 

[LdiJ]

What is the name of your state (only U.S. law)? NC
We live in N.C. and my husband just won a judgment against his ex-wife for violation of full disclosure, which affected their equitable distribution. This week he was awarded @ $60K. She still uses a credit card that is jointly held in both their names and was ordered to transfer the balance to an account in her own name within 30 days. He now believes she is planning to file bankruptcy hoping the unsecured debt she owes him will be discharged. Furthermore, she has no intention of transferring his name from her card, knowing he will be liable for the $13,000+ still outstanding. Is there anything he can do to protect himself from the credit card balance if she refuses to comply with the court to remove his name? Would her debt to him be considered non-dischargeable since it was incurred on the basis of fraud?

Its possible that she may be able to file bankruptcy against the debt owed to your husband. Its also certain that if she files on the credit card, that the credit card company will go after your husband for the balance. The credit card company is not a party to the divorce, and is therefore bound only by the terms of the credit agreement.

What was her fraud? What did she not disclose? With better details regarding the property settlement and what wasn't disclosed, we may be able to give better advice.

If she has any kind of significant assets, she is not necessarily going to be able to file bankruptcy...or will have to file chapter 13.

 

[CMS2016]

It's complicated, but let me try to sum it up. When they negotiated terms of settlement 6 years ago, she had diverted marital funds from an equity line into an inherited account and lied about it, which affected equitable distribution. He found out after the agreement was signed and she said "you're too late". Because of the projected legal costs, he opted not to sue. She demanded more $$, he refused and she then sued him for breach (pertaining to underpaying required insurance) He had to hire a lawyer for his defense, and took the opportunity to countersue. He proved in mediation that he had paid all invoices, but she rejected the mediator's recommendation and went to court. He had unmitagated proof of her fraud as well as his compliance, she lost and he won a $60K judgment . She was supposed to pay off their joint credit card 5 years ago and transfer to an individual account(he had one, too), but she didn't. Last week, the court ordered her to do so within 30 days. She now says she will file banckruptcy, expecting her debt to him to be discharged and her $13K debt to the cc company becoming his responsibility. If a court order has no bearing, then why would anyone pay off a big debt if they can just "stick it to their ex"?

 

[LdiJ]

It's complicated, but let me try to sum it up. When they negotiated terms of settlement 6 years ago, she had diverted marital funds from an equity line into an inherited account and lied about it, which affected equitable distribution. He found out after the agreement was signed and she said "you're too late". Because of the projected legal costs, he opted not to sue. She demanded more $$, he refused and she then sued him for breach (pertaining to underpaying required insurance) He had to hire a lawyer for his defense, and took the opportunity to countersue. He proved in mediation that he had paid all invoices, but she rejected the mediator's recommendation and went to court. He had unmitagated proof of her fraud as well as his compliance, she lost and he won a $60K judgment . She was supposed to pay off their joint credit card 5 years ago and transfer to an individual account(he had one, too), but she didn't. Last week, the court ordered her to do so within 30 days. She now says she will file banckruptcy, expecting her debt to him to be discharged and her $13K debt to the cc company becoming his responsibility. If a court order has no bearing, then why would anyone pay off a big debt if they can just "stick it to their ex"?[/QUOTE]

Because most people do want to preserve their own credit, and would therefore not file bankruptcy merely to stick it to their ex.

A court order does have a bearing, and a judge could issue a further judgement. The problem is that again, creditors are not parties to divorces and are only bound by the original loan/credit contract. Unless an ex has or will have significant assets, AND cares about their credit, it can be quite difficult to collect against them.

 

[CMS2016]

In this particular case, the ex-wife had inherited funds of @ $1/4M, which did not factor into the equity.Their only assets were the home and his IRA. She got half the IRA and he got the house, but also got the mortgage, along with the equity line and cc debts (except the one card she was to pay off) He is a salaried employee so there were no bonuses he could use to pay off debts. He sold his house, but it took both the profit and a good part of his remaining IRA to pay the loans off. Meanwhile, she had her inheritance, 1/2 the IRA and @$100,000 in $$ she had taken, totalling @ $500K. I know that this doesn't matter to anyone from a legal stance, but after 22 years of marraige, knowing exactly what she was doing, she set him up. She is a banker!! She knows how to manipulate finances,and took what wasn't hers. Still, within 2 years she had spent it all. She has nothing left. If she does file for bankruptcy, it is because she was totally reckless. My husband lost almost everything he had due to her fraud, and he paid dearly. It isn't right that a person who was conned to begin with, obeyed the court, spent all he had to pay it off, and has yet to recover must still be responsible for the cavalier actions of the person he divorced 6 years earlier. Is there no protection???

 

[mistoffolees]

In this particular case, the ex-wife had inherited funds of @ $1/4M, which did not factor into the equity.Their only assets were the home and his IRA. She got half the IRA and he got the house, but also got the mortgage, along with the equity line and cc debts (except the one card she was to pay off) He is a salaried employee so there were no bonuses he could use to pay off debts. He sold his house, but it took both the profit and a good part of his remaining IRA to pay the loans off. Meanwhile, she had her inheritance, 1/2 the IRA and @$100,000 in $$ she had taken, totalling @ $500K. I know that this doesn't matter to anyone from a legal stance, but after 22 years of marraige, knowing exactly what she was doing, she set him up. She is a banker!! She knows how to manipulate finances,and took what wasn't hers. Still, within 2 years she had spent it all. She has nothing left. If she does file for bankruptcy, it is because she was totally reckless. My husband lost almost everything he had due to her fraud, and he paid dearly. It isn't right that a person who was conned to begin with, obeyed the court, spent all he had to pay it off, and has yet to recover must still be responsible for the cavalier actions of the person he divorced 6 years earlier. Is there no protection???

It's hard to believe that she had $1.4 M from an inheritance and $500 K from the marriage and spent it all (especially since she's a banker and knows something about finance). It's also pretty hard to believe that she got $500 K from the marriage and he got nothing (judgments are sometimes one sided, but not THAT much). Sorry, but the story just doesn't ring true-especially since it's coming from a third party.

I would suggest that he file for contempt to recover the actual damages he might have incurred - payment of things that he shouldn't have to have paid and so on. I'm willing to be that she has plenty of money stowed away somewhere and that bankruptcy isn't going to happen.

BTW, for others reading this thread, this is yet ANOTHER example of why there needs to be a clean break at divorce. Cancel joint credit cards. Close joint accounts. Refinance mortgages in one name or sell the property. And so on. Continuing to share finances after a divorce has almost no upside and huge downside risk.

 

[LdiJ]

It's hard to believe that she had $1.4 M from an inheritance and $500 K from the marriage and spent it all (especially since she's a banker and knows something about finance). It's also pretty hard to believe that she got $500 K from the marriage and he got nothing (judgments are sometimes one sided, but not THAT much). Sorry, but the story just doesn't ring true-especially since it's coming from a third party.

I would suggest that he file for contempt to recover the actual damages he might have incurred - payment of things that he shouldn't have to have paid and so on. I'm willing to be that she has plenty of money stowed away somewhere and that bankruptcy isn't going to happen.

BTW, for others reading this thread, this is yet ANOTHER example of why there needs to be a clean break at divorce. Cancel joint credit cards. Close joint accounts. Refinance mortgages in one name or sell the property. And so on. Continuing to share finances after a divorce has almost no upside and huge downside risk.

I think the 500k included the 250k inheritance, plus money she squirreled away and did not disclose in the divorce.

Even a banker could blow that much in a couple of years...a house bigger than could be realistically afforded, all new furnishings, a fancy car and a few fancy vacations...and viola, its gone.

 

[CMS2016]

You said most people want to protect their credit and wouldn't declare bankruptcy for the sake of merely sticking it to their ex. Let me add that most people also wouldn't steal from their ex, frame them for the debt, try to extohrt more or file a bogus law suit. She figured he'd concede to her demands before being saddled with even higher legal bills. This time she gambled and lost.
I think you've got it now. Her banking background taught her how to shift money around, not gaurantee her success at hanging onto it. She was crafty enough skim off the top, leave confusing and complicated records of accountability and then convince her husband and both attorneys she had spent the $$ (over time) on family expenses. I guess she and her new boyfriend, in their haste to start over, weren't quite as sharp at managing it as they were at stealing it.
I agree with "mistoffolees" advice to others who may be reading this. A clean break is the only option. Pay off your debts before you split, no matter what.
But also keep in mind that when a couple splits, each will be fending for himself. If you happen to suspect you have a lying, cheating, doublecrossing soon-to-be ex-spouse, do your digging before you sign any papers. The humiliation of being conned is bad enough, but when people like "mistoffolees" think your story is too bizarre to be true, asking for advice is like asking for another kick in the gut.
But if there is anyone reading this who knows the law in N.C., I'd still like to know if there is anything my husband can do if she files bankruptcy.

 

[CMS2016]

Mistoffolees....I just wanted to mention that I think you misunderstood my post. The wife did not inherit $1.4 million, but one quarter million. I should have stated it as $250,000...sorry for the confusion. But her inheritance is still irrelevant, since in N.C. it is not subject to equitable distribution. The way the assets were split was that each got half the IRA. The only other asset they had was the house, which had equity of @ $148,000. Their debt was @ $160,000....$55,000 in credit cards and the remainder in the equity line (which is what the wife diverted).The equity in the house was countered by that much of the debt, so my husband didn't end up with nothing. He had the house and his half of the IRA. And she did not get $500K from the marraige. All she got was $125,000 from the IRA. The rest was her inheritance, which included the $112,000 she took from marital assets without disclosure. It is hard to imagine someone could spend almost $2 million in 2 years, but she did spend all of the $500,000. Does this ring more true? Third party information can often be inaccurate, but I do know the facts about this. I am only seeking advice in this forum and want to clarify my problem as accurately as I can so that we can avoid any further problems connected with his former spouse. My apologies for being unclear to begin with.

 

[mistoffolees]

Mistoffolees....I just wanted to mention that I think you misunderstood my post. The wife did not inherit $1.4 million, but one quarter million. I should have stated it as $250,000...sorry for the confusion. But her inheritance is still irrelevant, since in N.C. it is not subject to equitable distribution. The way the assets were split was that each got half the IRA. The only other asset they had was the house, which had equity of @ $148,000. Their debt was @ $160,000....$55,000 in credit cards and the remainder in the equity line (which is what the wife diverted).The equity in the house was countered by that much of the debt, so my husband didn't end up with nothing. He had the house and his half of the IRA. And she did not get $500K from the marraige. All she got was $125,000 from the IRA. The rest was her inheritance, which included the $112,000 she took from marital assets without disclosure. It is hard to imagine someone could spend almost $2 million in 2 years, but she did spend all of the $500,000. Does this ring more true? Third party information can often be inaccurate, but I do know the facts about this. I am only seeking advice in this forum and want to clarify my problem as accurately as I can so that we can avoid any further problems connected with his former spouse. My apologies for being unclear to begin with.

Yes, I misread the $1/4 M. Sorry.

But her inheritance is NOT irrelevant. It is true that it can not be divided, but if she ran up credit card debt in violation of a court order, he can sue for contempt and would be able to collect from any money she has, including her inheritance.

 

[CMS2016]

Her inheritance is gone...that is why she plans to file for bankruptcy. But if she ran up the creditcard before she ran through her inheritance, would that have any bearing?

 

[mistoffolees]

Her inheritance is gone...that is why she plans to file for bankruptcy. But if she ran up the creditcard before she ran through her inheritance, would that have any bearing?

If she truly doesn't have any assets, it doesn't matter which assets she squandered first.