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Is this frivolous litigation?

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Juris

New member
What is the name of your state? Virginia

Under the Separation Agreement that was incorporated in the Divorce Decree, I was to pay a loan for which my ex-wife was co-signer. Subsequently, I filed Chapter 13.

The Trustee, the Creditor, and my bankruptcy attorney sent notice to her, and her attorney, that this debt was discharged. Then, my ex-wife's attorney filed a Show Cause for my willfully not paying the debt.

Is it frivolous to file a Show Cause for willfully not paying a loan that was discharged?
 


LdiJ

Senior Member
What is the name of your state? Virginia

Under the Separation Agreement that was incorporated in the Divorce Decree, I was to pay a loan for which my ex-wife was co-signer. Subsequently, I filed Chapter 13.

The Trustee, the Creditor, and my bankruptcy attorney sent notice to her, and her attorney, that this debt was discharged. Then, my ex-wife's attorney filed a Show Cause for my willfully not paying the debt.

Is it frivolous to file a Show Cause for willfully not paying a loan that was discharged?
Not at all. In fact, you are likely to get seriously slammed by the judge. By including that loan in bankruptcy you effectively forced it upon your ex wife. She will be forced to pay it by the creditor now. Your bankruptcy did not remove her responsibility for the loan, it only removed yours.

You seriously should have discussed the matter with your divorce attorney BEFORE you filed for bankruptcy.
 

Zigner

Senior Member, Non-Attorney
Not at all. In fact, you are likely to get seriously slammed by the judge. By including that loan in bankruptcy you effectively forced it upon your ex wife. She will be forced to pay it by the creditor now. Your bankruptcy did not remove her responsibility for the loan, it only removed yours.

You seriously should have discussed the matter with your divorce attorney BEFORE you filed for bankruptcy.
You really don't have enough information to make such a definitive statement. The OP's obligation to the ex could have been terminated by the bankruptcy as well.
 

Juris

New member
It is my understanding that the Chapter 13 did terminate my obligation to my ex-wife personally as well as the co-signed debt. I did inquire of the bankruptcy attorney (who also practices Family Law) and the Trustee.
 

Zigner

Senior Member, Non-Attorney
It is my understanding that the Chapter 13 did terminate my obligation to my ex-wife personally as well as the co-signed debt. I did inquire of the bankruptcy attorney (who also practices Family Law) and the Trustee.
Then I would suggest that you discuss this matter with your bankruptcy attorney.
 

adjusterjack

Senior Member
It is my understanding that the Chapter 13 did terminate my obligation to my ex-wife personally
Did you see that in your discharge papers?

11 US Code 523 Exceptions to discharge:

(5) for a domestic support obligation;
(15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit;
While the debt to the creditor was discharged, the separation agreement might not be subject to discharge.

I'm not saying it is or it isn't. That's up to the court to decide.

Then I would suggest that you discuss this matter with your bankruptcy attorney.
And have the attorney document the reply with appropriate citations of appellate case decisions.

That way you aren't relying on your "understanding" which may have been from a long forgotten conversation.
 

Zigner

Senior Member, Non-Attorney
While the debt to the creditor was discharged, the separation agreement might not be subject to discharge.

I'm not saying it is or it isn't. That's up to the court to decide.
It might be a bit sticky here because our OP was ordered to pay the obligation directly to the creditor, not to his ex.

Yep - the OP's probably going to want an attorney to help in this matter.
 

Taxing Matters

Overtaxed Member
Is it frivolous to file a Show Cause for willfully not paying a loan that was discharged?
It is not frivolous so long as she has some basis for an argument that the obligation to her was not discharged. Under the bankruptcy code there are exceptions to discharge for debts owed to a spouse as a result of a divorce or similar decree. So she may point to that to argue that the debt was not discharged. That does not mean she will will win. That's a whole different issue. It doesn't take much for the claim to not be frivolous. It takes more for her to prove that she's actually right that you are in violation of the order.
 

Ohiogal

Queen Bee
Did you see that in your discharge papers?

11 US Code 523 Exceptions to discharge:



While the debt to the creditor was discharged, the separation agreement might not be subject to discharge.

I'm not saying it is or it isn't. That's up to the court to decide.



And have the attorney document the reply with appropriate citations of appellate case decisions.

That way you aren't relying on your "understanding" which may have been from a long forgotten conversation.
That is regarding child support or spousal support. However if OP was to idemnify her from harm, that is an issue. And it would not be frivolous on other debts.
 

quincy

Senior Member
... The Trustee, the Creditor, and my bankruptcy attorney sent notice to her, and her attorney, that this debt was discharged. ...
Do you have copies of the notices sent to your ex-wife by the trustee, creditor and bankruptcy attorney?

I agree with the others that you should discuss this with your attorney.
 

LdiJ

Senior Member
You really don't have enough information to make such a definitive statement. The OP's obligation to the ex could have been terminated by the bankruptcy as well.
Which definitive statement?

Its not frivolous, so you can't mean that statement.

Its absolutely true that by including the loan in the bankruptcy he effectively transferred it to his ex wife because his bankruptcy did not cancel HER obligation to the creditor. Its absolutely true that the creditor will hold her responsible for the loan so you can't mean that part.

The fact that he should have discussed it with his divorce attorney before filing bankruptcy is also true, so you can't mean that part.

The fact that he is likely to get seriously slammed by the judge is not a definitive statement...due to the bolded.
 

quincy

Senior Member
There really is nothing that can be said to be “absolutely true” about a poster’s situation, based on the little information provided in posts on a forum. Absolutes are best avoided.

I agree that the attorney should be contacted.
 

LdiJ

Senior Member
There really is nothing that can be said to be “absolutely true” about a poster’s situation, based on the little information provided in posts on a forum. Absolutes are best avoided.

I agree that the attorney should be contacted.
Its absolutely true that in a bankruptcy, unless its a joint bankruptcy, that any debt with a cosigner becomes automatically the responsibility of the cosigner. I can safely use the word absolutely in that context because its a basic as it gets.
 

Litigator22

Active Member
Did you see that in your discharge papers? . . . 11 US Code 523 Exceptions to discharge: . . I'm not saying it is or it isn't. That's up to the court to decide. . .
Pardon me for asking, but if you can't say it is or it isn't why is it necessary to say anything?

Also why the bare insertion of Section 523 (a) of the Bankruptcy Code "Exceptions to discharge"? Particularly when the OP is concerned with obligations dischargeable in a Chapter 13 filing?

It is true that 523(a) has some but limited application to a Chapter 13, but if you and Ohiogal will bother to read Code Section 1328 you will find that there are some debts that are dischargeable under a Chapter 13 filing that are not discharged in a Chapter 7; including - such as here - debts owed to a spouse or former spouse in connection with a settlement agreement of divorce proceeding that are NOT classified as support obligations!
 

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