What Happens When the Ex-Spouse Does Not Pay Credit Cards As Ordered?

One of the results of divorce proceedings is that a judge will often order one of the divorcing spouses to pay down the debts owed by the other spouse. This is often a result of a court ordered obligation to provide domestic support, or simply a way to equalize the debts or assets as part of the property settlement needed to end the marriage. In many cases, the divorcing couple does not realize that the court order will only affect the two of them, and not the third party, which could be a mortgage lender, or credit card company.

Both Parties Still Owe the Bill

Some cases concerning bankruptcies often disrupt the court order, wreaking havoc on one or both parties from the divorce. In the case where one spouse is ordered by the court to make payments on the debts of the other spouse, filing for bankruptcy can create an immediate problem for the other individual. With his or her inability to pay, the individual files bankruptcy and is no longer required to make monthly payments. As a result, the credit card company, mortgage holder, or loan officer will often contact the other spouse and demand all the payments in arrears.

The resulting bankruptcy is not the problem of the lender. Both parties still have the legal obligation to pay all of their acquired debts, including credit cards and mortgages, whether or not the judge ordered the other party to do so.

The Lender Is Not Usually Involved

During the divorce proceedings, it was the family law court that was used to create a legal obligation between both parties in the divorce suit, but did not involve the lender. If the ex-spouse chooses to file bankruptcy or simply fails to make payments on his or her obligation, the only remedy left is the ability to go after the ex-spouse, and not the lender.

Is It a Support or Equalization Obligation?

Even going after the ex-spouse to get the money can prove to have its own problems. In certain circumstances, the order issued by the Family Court might have been used as a tool to equalize obligation or offer support. If the order details that the money owed is for support, then the injured party can seek a remedy in Family Court, which might not be discharged as part of the bankruptcy case.

Alternatively, if the Family Court decided that the debt was simply an equalization payment, there might not be an available remedy. If the ex-spouse filed Chapter 13 bankruptcy, then the injured party might simply have no recourse. Through a Chapter 7 bankruptcy proceeding, it is possible that the injured party can go back to Family Court and file a specific proof of claim with the ex-spouse’s case to be a part of the shared distribution.

The Process Takes Time

In Chapter 7 bankruptcy cases, the process takes time. Whether or not there is any remedy to be sought from the ex-spouse, it is important to understand that the injured party is still going to be liable for the debt, and need to deal directly with every creditor. The lender may be willing to renegotiate a payment. Another alternative is to file bankruptcy just as the ex-spouse did.

There is no easy answer to what to do when the ex-spouse does not pay the credit cards he or she is ordered by the courts to make. Any individual that finds themselves in this position should immediately seek out the consultation of an experienced bankruptcy lawyer that also has years of skill dealing directly with Family Court.