Can Bankruptcy Clear My Ex Spouse's Debts After Divorce?

Joint Debts

One type of debt that your ex-spouse may attempt to discharge is your joint marital debt. As a general rule, if you and your former spouse held debt together, such as mortgage or credit card debt, her bankruptcy filing could potentially leave you on the hook for the debt. This is especially likely if your separation or divorce agreement did not address who would be responsible for the debt. If your ex-spouse files for a Chapter 7 bankruptcy case, you may remain liable for the debt if she receives a Chapter 7 discharge. Conversely, if she chooses to file a Chapter 13 bankruptcy case, you will not be responsible for the debt unless she fails to successfully complete the Chapter 13 repayment plan.

Domestic support obligations are another type of debt that your ex-spouse may attempt to discharge in bankruptcy. However, bankruptcy law prohibits individuals from discharging domestic support obligations in any type of bankruptcy. These include alimony, child support and other obligations intended as support for a debtor's former spouse, current spouse, child or child's parent. Regardless of whether the debt arose on, after or before the bankruptcy filing date, your ex-spouse may not discharge it though a bankruptcy proceeding.

Your ex-spouse may attempt to discharge divorce-related expenses. The U.S. bankruptcy code specifies that divorce-related expenses are nondischargeable in a Chapter 7 bankruptcy. Divorce-related expenses are those owed "to a spouse, former spouse, or child of the debtor…" that are not for domestic support obligations and that are “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..." An example is a debt that your divorce decree specified your ex-spouse would pay to you directly. You must prove that the debt is a divorce-related expense if you want to prevent your ex-spouse from discharging it. Although divorce-related expenses are nondischargeable in a Chapter 7 bankruptcy, they are dischargeable in a Chapter 13 bankruptcy.

No matter how the debt is classified, your ex-spouse may not discharge debts stemming from a breach of fiduciary duty, fraud, larceny or embezzlement. Debts arising from your ex-spouse's deceptive conduct are like domestic support obligations in that they are nondischargeable no matter which chapter of the bankruptcy code that your ex-spouse files under.