Questions regarding bankruptcy and Divorce

[crayiii]

I have my 341 meeting today for my chapter 7 bankruptcy. The settlement papers that my wife’s attorney and I stipulated to are sitting on my counter unsigned by me for the following reasons:

1) The debt is all listed as being my responsibility.
2) There is a hold-harmless provision regarding the debt.

My bankruptcy attorney told me not to sign it because the hold-harmless provision could very well make my (marital) debt non-dischargeable.

Here are some facts:

My bankruptcy is in the State of Oregon, a non community property state
The divorce is in Washington State, a community property state
None of the debt is joint debt (wife’s name is on none of it)
Some of the credit card debt occurred while we both lived in Washington
We have been separated for almost 2 years
Divorce was filed about 10-months ago
There has never been a request for support

Text of the hold harmless provision: “Each party shall hold the other party harmless from any collection action relating to separate or community liabilities set forth above, including reasonable attorney’s fess and costs incurred in defending against any attempts to collect an obligation of the other party”

Here are my questions:

1) After my debt has been discharged, can the state court reassign the debt to me in the decree?

2) Would the state court see the debt as a liability for my wife even though none of the accounts were joint?

3) If I sign the settlement that lists all of these debts as my responsibility and includes the hold harmless provision, will that supersede the bankruptcy?

4) After the bankruptcy don’t the discharged debts cease to be my “obligation” under the hold harmless provision?

5) If you were my wife’s attorney, what would you be doing to protect your client from my bankruptcy?

[LdiJ]

Originally Posted by crayiii

1) After my debt has been discharged, can the state court reassign the debt to me in the decree?

2) Would the state court see the debt as a liability for my wife even though none of the accounts were joint?

3) If I sign the settlement that lists all of these debts as my responsibility and includes the hold harmless provision, will that supersede the bankruptcy?

4) After the bankruptcy don’t the discharged debts cease to be my “obligation” under the hold harmless provision?

5) If you were my wife’s attorney, what would you be doing to protect your client from my bankruptcy?

The key to all of your questions is whether or not the creditors have the right to go after your ex for any of your debt, under the guise of "community property". Your bankruptcy attorney is the best person to answer that question.

However, if they can, then the "hold harmless" clause would be a way to protect his client. It wouldn't stop the creditors from going after her, but it would give her the ability to go after you for the debt, even if you have already discharged it in bankruptcy.