OK, here's one.

[Roscoe]

If a "party" is getting a divorce (been separated for 4 months) and 1 spouse has filed for Bankrputcy under Chapter 13 (after separation) and the other spouse has "reassigned" their debts to their parents (before separation but # 1 spouse did not know this) , i.e., their parents took out a loan, paid the credit cards off, etc (but the spouse makes the payments -- but the loan is in the parents name)when it comes time to split everything up:

# 1 spouse has no debts as it in Chapter 13
# 2 spouse has no debts because the parents took it over

...is there anything to split up (debt wise?)? Trying to find an answer for a neighbor who (believe it or not) does not have a computer/net. Lower Pennsylvania.

 

[I AM ALWAYS LIABLE]

My response:

Unless the creditors are aware, and have agreed to, the "reassignment" of the debts, then yes, there are still "debts to be split up".

But, in the event one spouse declares Bankruptcy, then all marital debt falls on the shoulders of the non-declaring spouse.

Obviously, if the creditors have not agreed to a "reassignment" to the parents, the creditors will continue to look to the non-declaring spouse in the event of a default on the debts.

IAAL

[Edited by I AM ALWAYS LIABLE on 01-28-2001 at 10:51 AM]

 

[Roscoe]

Thank you for your response....

I think I did not make myself clear, my apologies. According to friend, when spouse # 2 went to take a consolidation loan out, the finance company would not give it to them. Therefore, the parents took the loan and paid off all credit cards that were used by this spouse. As far as the credit companies are concerned, they have been paid. I have since found out that the parents also needed some extra money and that is why they decided to take the loan out in their name (not co-signed - actually in their name -- house as collateral). However, while the loan continues to be in the parents name, the spouse makes (either the full or a partial -- hasn't been determined) payment. Does your response still stand?

Also, according to conversation, the debts that were included in the bankruptcy will not fall on the non declaring spouse -- they were individual accounts in spouse # 1's name only (since learned). (And, spouse # 1 was provided this information by the bankrputcy attorney.) There was no possible way for the credit card companies to go after debt that was under an individual account; only the indivdual who signed the credit "contract" (if you will) is liable. Apparently, this has also been confirmed by spouse # 2 divorce attorney.

[Edited by Roscoe on 01-28-2001 at 07:17 PM]