Why can't I include joint debt agreed to in divorce in bankruptcy?

[sarnold]

Background: Married 25 years. Divorced May 2011 in Kentucky. Currently living in Ohio. Ex-husband filed for divorce per my wishes. He hired a lawyer and we agreed on everything via separation agreement. At the time it looked pretty simple so I didn't hire a lawyer. The agreement was that the family home would be sold but until then we would each pay half the mortgage and half the small credit line. I had ran up significant credit card debt(for family living expenses) that I agreed to take on and half of a credit card in his name (crazy, I know). I moved out of house October 2010. Divorce was final May 2011. House has been for sale since July 2011. Since then, I have filed bankruptcy (Chapter 7)on my credit card debt and some medical expenses. I was able to keep my car (which is still jointly owned because I can't get refinanced) and the bankruptcy court didn't want to touch the house or the credit card bill I am paying to ex-husband. The bankruptcy won't be final until June 2012.

The house isn't going to sell. He is living in it and although he keeps it clean, it doesn't show well. We have bottemed out the priced but there is still about $40,000 - $50,000 equity even giving it away. I just want out from under the mortgage payment and other debt I pay him monthly. He can't afford the house on his own. I can't afford to keep giving him a third of my paycheck. Do I have any options? Do I have to go back to county I was divorced in (where house is) to modify the agreement? Can it be modified? I don't know what to do. My bankruptcy lawyer doesn't really know what to do? Any suggestions?

 

[despritfreya]

The agreement was that the family home would be sold but until then we would each pay half the mortgage and half the small credit line.

This looks like a property settlement which is not dischargeable in a Chapter 7. You remain obligated to your ex to provide for the payment. If you don’t your ex can sue you for that portion you were suppose to pay but did not. Or, assuming he held up his end, may surcharge your portion of the net proceeds from the sale.

I had ran up significant credit card debt that I agreed to take on and half of a credit card in his name.

Again, this sounds like division of the marital debt (not support) and, if you fail to pay and the creditor goes after your ex, your ex has a claim against you as your obligation arising out of the divorce decree is not dischargeable in a Chapter 7.

I have filed bankruptcy on my credit card debt and some medical expenses.

No, you filed bk on ALL debt. You wish to keep the vehicle so you agreed to continue to pay for it. Certain debt, like that from the divorce decree, are not dischargeable.

The bankruptcy won't be final until June 2012. . . I just want out from under the mortgage payment and other debt I pay him monthly.

If you “want out”, you should not have filed a Chapter 7 since obligations arising from a separation agreement or divorce decree are not dischargeable (your attny should have told you this as it is basic bk law). In a Chapter 13, unless the claim is “in the nature of support”, it is dischargeable. You need to sit down with your attny and discuss whether or not you should convert to a Chapter 13 so that you can discharge the “property settlement” of the divorce. Converting needs to happen before the entry of the 7 Discharge.

Des.